<PAGE>
AMERICAN EXPRESS
MONEY MARKET ACCOUNTS
OFFERED BY
THE RESERVE FUNDS
PRIMARY FUND
U.S. GOVERNMENT FUND
U.S. TREASURY FUND
INTERSTATE TAX-EXEMPT FUND
CALIFONIA II TAX-EXEMPT FUND
CONNECTICUT TAX-EXEMPT FUND
FLORIDA TAX-EXEMPT FUND
MASSACHUSETTS TAX-EXEMPT FUND
MICHIGAN TAX-EXEMPT FUND
NEW JERSEY TAX-EXEMPT FUND
NEW YORK TAX-EXEMPT FUND
OHIO TAX-EXEMPT FUND
PENNSYLVANIA TAX-EXEMPT FUND
VIRGINIA TAX-EXEMPT FUND
American Express Money Market Account is a cash management service offered by
The Reserve Funds through American Enterprise Investment Services Inc., a
subsidiary of American Express Financial Corporation. Shares offered are
shares of The Reserve Funds.
American Enterprise Investment Services Inc.
A SUBSIDIARY OF AMERICAN EXPRESS FINANCIAL CORPORATION
ANNUAL REPORT
May 31, 2000
[AMERICAN EXPRESS LOGO]
70100 AXP FINANCIAL CENTER
MINNEAPOLIS, MN 55474
www.americanexpress.com
-COPYRIGHT- 1998 American Express Financial Corporation
All rights reserved.
This literature is not authorized for distribution to prospective investors
unless preceded or accompanied by an appropriate current prospectus.
DISTRIBUTOR - RESRV PARTNERS, INC.
AMEX/ANNUAL 07/00 8023 VERSION C 6/00
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
--------------------------------------------------------------------------------
To the Shareholders and the Board of Trustees of The Reserve Fund, Reserve New
York Tax-Exempt Trust and Reserve Tax-Exempt Trust:
In our opinion, the accompanying statements of assets and liabilities, including
the portfolios of investments, and the related statements of net assets, of
operations and of changes in net assets and financial highlights present fairly,
in all material respects, the financial position of The Reserve Funds--Primary,
U.S. Government and U.S. Treasury Funds (three of the four series constituting
The Reserve Fund), Reserve New York Tax-Exempt Trust--New York Tax-Exempt Fund
and the Reserve Tax-Exempt Trust--California II, Connecticut, Florida,
Interstate, Massachusetts, Michigan, New Jersey, Ohio, Pennsylvania and Virginia
Tax-Exempt Funds (the "Trust") at May 31, 2000, and the results of their
operations for the period then ended, the changes in their net assets for each
of the two years in the period then ended, and the financial highlights for the
five years in the period then ended, in conformity with accounting principles
generally accepted in the United States. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Trust's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States, which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits, which included confirmation of securities at May 31,
2000 by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
PricewaterhouseCoopers LLP
New York, New York
July 15, 2000
2
<PAGE>
THE RESERVE FUND--PRIMARY FUND
STATEMENT OF NET ASSETS--MAY 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT NEGOTIABLE BANK CERTIFICATES OF DEPOSIT--76.0% (NOTE 1)
--------- ---------------------------------------------- --------
<C> <S> <C>
DOMESTIC--17.2%
$200,000,000 Harris Trust & Savings Bank, 6.59%, 7/3/00.............. $ 200,000,000
200,000,000 Southtrust Bank NA, 6.58%, 7/10/00...................... 200,000,000
150,000,000 U.S. Bank, N.A. 6.27%, 6/5/00........................... 150,000,000
200,000,000 Wilmington Trust Co., 6.20%--6.59%, 6/27/00--7/19/00.... 200,000,000
-------------------
750,000,000
-------------------
YANKEES--58.8%
200,000,000 Banque Nationale de Paris, 6.15%--6.31%,
6/6/00--6/19/00......................................... 200,000,000
200,000,000 Bayerische Hypo-und Vereinsbank, AG, 6.15%, 6/19/00..... 200,000,000
150,000,000 Canadian Imperial Bank of Commerce, 6.65%--6.74%,
8/17/00--2/12/01........................................ 149,966,724
180,000,000 Commerzbank, AG, 6.15%, 6/15/00......................... 180,000,000
80,000,000 Den Danske Bank, 6.46%, 6/14/00......................... 80,000,000
200,000,000 Deutsche Bank, AG, 6.75%, 8/23/00....................... 200,000,000
200,000,000 Dexia Bank, 6.75%, 8/24/00.............................. 200,000,000
200,000,000 Dresdner Bank, 6.20%, 6/26/00........................... 200,000,000
200,000,000 National Westminster Bank, PLC, 6.30%--6.56%,
6/5/00--11/22/00........................................ 199,950,938
150,000,000 Rabo Bank Nederland NV, 6.52%, 1/24/01.................. 149,962,970
200,000,000 Societe Generale, 6.25%, 7/17/00........................ 200,000,000
200,000,000 Svenska Handelsbaken, 6.44%, 6/12/00.................... 200,000,000
200,000,000 Toronto Dominion Bank, 6.14%, 6/15/00................... 200,000,000
200,000,000 Westdeutsche Landesbank Girozentrale, 6.75%, 3/23/01.... 199,923,341
-------------------
2,559,803,973
-------------------
Total Negotiable Bank Certificates of Deposit (Cost
$3,309,803,973)......................................... 3,309,803,973
-------------------
EURO TIME DEPOSITS--6.9%
150,000,000 Chase Manhattan Bank, 6.81%, 6/1/00..................... 150,000,000
150,000,000 Bank One, 6.81%, 6/1/00................................. 150,000,000
-------------------
Total Euro Time Deposits (Cost $300,000,000)............ 300,000,000
-------------------
REPURCHASE AGREEMENTS--20.9%
563,000,000 Bear, Stearns & Co. Inc., 6.55%, 6/1/00 (collateralized
by FNMA 0% due 12/20/27 valued at $3,235,452, FGRA 0%
due 10/15/27 valued $4,198,121, FGRM 6.00% to 8.00% due
7/15/09 to 10/15/27 valued at $24,888,611, FGSI 0% due
1/1/24 to 4/1/30 valued at $372,508,029, FNST 0% due
6/1/23 to 5/1/29 valued at $114,445,125, FNRA 0% due
2/25/24 valued at $1,099,919, FNRM 0% due 9/25/28 valued
at $2,908,844, FRRM 0% due 3/25/22 valued at
$29,137,756, GNMA 6.0% to 7.0% due 1/20/24 to 7/15/29
valued at $30,633,461)
563,000,000
350,000,000 Donaldson, Luftkin and Jenrette Securities Corp., 6.56%,
6/1/00 (collateralized by FGPC 5.50% to 7.0% due 1/10/24
to 11/18/27 valued at $226,890,812, FNMS 6.00% to 6.50%
due 9/1/28 to 7/1/29 valued at $133,609,815)
350,000,000
-------------------
Total Repurchase Agreements (Cost $913,000,000)......... 913,000,000
-------------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS (COST $4,522,803,973)............. 103.8% 4,522,803,973
LIABILITIES, LESS OTHER ASSETS...................... (3.8) (166,863,596)
-------- --------------
NET ASSETS.......................................... 100.0% $4,355,940,377
======== ==============
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE BASED
ON 4,355,940,377 SHARES OF BENEFICIAL INTEREST,
$.001 PAR VALUE OUTSTANDING................................... $1.00
==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
3
<PAGE>
THE RESERVE FUND--U.S. GOVERNMENT FUND
STATEMENT OF NET ASSETS--MAY 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT REPURCHASE AGREEMENTS--99.9% (NOTE 1)
--------- ---------------------------- --------
<C> <S> <C>
$367,000,000 Bear, Stearns & Co. Inc., 6.53%, 6/1/00 (collateralized
by GNMA,6.00% to 9.05% due from 6/15/09 to 4/15/37
valued at $389,888,122)................................. $ 367,000,000
300,000,000 DLJ Securities Corporation, 6.55%, 6/1/00
(collateralized by GNMA, 5.50% to 10.50%due from 7/15/01
to 5/20/30 valued at $309,002,244)...................... 300,000,000
-----------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL REPURCHASE AGREEMENTS (COST $667,000,000)..... 99.9% 667,000,000
OTHER ASSETS, LESS LIABILITIES...................... 0.1 698,041
-------- ------------
NET ASSETS.......................................... 100.0% $667,698,041
======== ============
NET ASSET VALUE, OFFERING AND REDEMPTION PRICES PER SHARE
BASED ON 667,698,041 SHARES OF BENEFICIAL INTEREST,
$.001 PAR VALUE OUTSTANDING................................... $1.00
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE>
THE RESERVE FUND--U.S. TREASURY FUND
STATEMENT OF NET ASSETS--MAY 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT U.S. TREASURY BILLS--99.3% (NOTE 1)
--------- -------------------------- --------
<C> <S> <C>
$20,000,000 5.39%, 6/1/00....................................... $ 20,000,000
41,000,000 5.55%--5.60%, 6/8/00................................ 40,955,696
30,000,000 5.50%, 6/15/00...................................... 29,935,833
41,000,000 5.50%--5.53%, 6/22/00............................... 40,868,473
21,000,000 5.56%, 6/29/00...................................... 20,909,187
35,500,000 5.56--5.63%, 7/6/00................................. 35,306,795
25,000,000 5.25%--5.62%, 7/13/00............................... 24,836,865
42,000,000 5.48%--5.99%, 8/17/00............................... 41,480,496
30,000,000 5.60%--5.85%, 8/24/00............................... 29,594,525
21,000,000 5.76%--5.88%, 9/7/00................................ 20,670,393
38,000,000 5.95%--6.13%, 11/2/00............................... 37,028,217
54,500,000 6.09%--6.12%, 11/9/00............................... 53,014,127
-----------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL U.S. TREASURY BILLS (COST $394,600,607)....... 99.3% 394,600,607
OTHER ASSETS, LESS LIABILITIES...................... 0.7 2,601,929
-------- ------------
NET ASSETS.......................................... 100.0% $397,202,536
======== ============
NET ASSET VALUE, OFFERING AND REDEMPTION PRICES PER SHARE
BASED ON 397,202,536 SHARES OF BENEFICIAL INTEREST,
$.001 PAR VALUE OUTSTANDING................................... $1.00
============
</TABLE>
GLOSSARY
FGPC -- FHLMC Gold Mortgage-Backed Pass-Through Participation
Certificates
FGRA -- Federal Home Loan Mortgage Corp. ("FHLMC") Gold Adjustable
Rate REMIC
FGRM -- FHLMC Gold REMIC Mortgage-Backed Pass-Through Participation
Certificates
FGSI -- Freddie MAC Gold Strip Interest Portion
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
FNMS -- FNMA Mortgage-Backed Pass-Through Securities
FNRA -- FNMA REMIC Adjustable Rate Mortgage-Backed Pass-Through
Securities
FNRM -- Federal National Mortgage Association ("FNMA") REMIC
Mortgage-Backed Pass-Through Securities
FNST -- FNMA Strip
FRRM -- Government National Mortgage Association ("GNMA") REMIC
issued by FHLMC Fixed Rate
GNMA -- Government National Mortgage Association
REMIC -- Real Estate Mortgage Investment Conduit
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE>
RESERVE TAX-EXEMPT TRUST--INTERSTATE TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--MAY 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS--104.3% (NOTE 1)
--------- ------------------------------ --------
<C> <S> <C>
ALASKA--1.1%
$3,000,000 North Slope Boro, Series A, 5.55%, 6/30/00 (b).......... $ 3,003,610
-----------------
ARIZONA--2.3%
1,000,000 Apache County IDA for Tucson Electric Power Company,
4.10%, 12/1/20 (a)...................................... 1,000,000
540,000 Avondale IDA for National Health Investors, 4.35%,
12/1/14 (a)............................................. 540,000
1,000,000 Maricopa County PCR for Arizona Public Service, 4.35%,
5/1/29 (a).............................................. 1,000,000
3,700,000 Pinal County PCR for Magma Copper, 4.35%, 12/1/09 (a)... 3,700,000
-----------------
6,240,000
-----------------
CALIFORNIA--2.1%
100,000 California HFAR for Adventist Health Systems, 4.05%,
8/1/21 (a).............................................. 100,000
630,000 California HFA, 3.50%, 7/15/13 (a)...................... 630,000
600,000 California School Financing Corp. for Capital
Improvement Fing., 3.80%, 7/1/22 (a).................... 600,000
1,000,000 Hayward MFH for Shorewood, 3.90%, 8/1/14 (a)............ 1,000,000
2,400,000 Los Angeles County Transport Community STRB, 3.85%,
7/1/05 (a).............................................. 2,400,000
900,000 San Francisco City & County Redev. Agency, 3.40%,
12/1/17 (a)............................................. 900,000
-----------------
5,630,000
-----------------
COLORADO--2.6%
2,800,000 Arapahoe School District #5 for Cherry Creek TAN, 4.25%,
6/30/00................................................. 2,801,146
2,230,000 Arvada URAB for Arvada City, 5.00%, 9/1/00 (b).......... 2,235,707
900,000 Broomfield IDA for Buckeye Investments Project, 4.45%,
12/1/09 (a)............................................. 900,000
850,000 Denver Airport, Series B, 4.30%, 12/1/20 (a)............ 850,000
400,000 Smith Creek Metro District, 4.40%, 10/1/35 (a).......... 400,000
-----------------
7,186,853
-----------------
CONNECTICUT--1.4%
400,000 Connecticut Special Tax Transportation Infrastructure
Second Lien Revenue Bonds, 4.10%, 12/1/10 (a)........... 400,000
500,000 Connecticut HEFA for Gaylord Hospital, Series A, 3.95%,
7/1/20 (a).............................................. 500,000
1,895,000 Connecticut HEFA for Charlotte Hungerford, Series C,
4.10%, 7/1/13 (a)....................................... 1,895,000
1,100,000 Hartford Redev. Agency MFH for Underwood Towers Project,
4.05%, 6/1/20 (a)....................................... 1,100,000
-----------------
3,895,000
-----------------
DISTRICT OF COLUMBIA--1.5%
2,000,000 Washington, D.C. General Fund Recovery, Series B-3,
4.50%, 6/1/03 (a)....................................... 2,000,000
2,200,000 Washington, D.C. HFA for MFH Chastleton, 3.50%, 7/1/27
(a)..................................................... 2,200,000
-----------------
4,200,000
-----------------
FLORIDA--8.5%
500,000 Dade County HFAR for Miami Children's Hospital, 4.15%,
9/1/25 (a).............................................. 500,000
1,400,000 Dade County IDA for Dolphin Stadium Project, Series C,
4.10%, 1/1/16 (a)....................................... 1,400,000
100,000 Florida Gulf Coast for University of Florida, COP,
4.45%, 8/1/27 (a)....................................... 100,000
700,000 Florida HFA for Multifamily Lake, 4.40%, 6/1/07 (a)..... 700,000
10,000 Gulf Breeze, Series 85 A Revenue Bonds, 4.30%, 12/1/15
(a)..................................................... 10,000
400,000 Martin County PCR for Florida Power & Light, 4.30%,
9/1/24 (a).............................................. 400,000
2,100,000 Martin County PCR for Florida Power & Light, 4.40%,
7/15/22 (a)............................................. 2,100,000
1,700,000 Miami Dade County School Board COP, 4.25%, 8/1/00 (b)... 1,700,820
1,000,000 Orange HFAR for Adventist Health Systems, 4.40%,
11/15/14 (a)............................................ 1,000,000
1,000,000 Pinellas Recovery, Series A, 6.60%, 10/1/00 (b)......... 1,008,040
10,000,000 Pinellas School District TAN, 4.25%, 6/30/00............ 10,004,630
1,500,000 Port St. Lucie PCR for Florida Power & Light, 4.30%,
1/1/26 (a).............................................. 1,500,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
RESERVE TAX-EXEMPT TRUST--INTERSTATE TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--MAY 31, 2000 (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS (CONTINUED) (NOTE 1)
--------- ---------------------------------- --------
<C> <S> <C>
$1,580,000 Putnam Country PCR for Florida Power & Light, 4.30%,
9/1/24 (a).............................................. $ 1,580,000
700,000 Sarasota County HFAR for Health Care--Bay Village,
4.45%, 12/1/23 (a)...................................... 700,000
200,000 Sunshine State Governmental Fin. Commission, 4.30%,
7/1/16 (a).............................................. 200,000
400,000 University of N. Florida for Capital Improvement
Project, 4.40%, 11/1/24 (a)............................. 400,000
-----------------
23,303,490
-----------------
GEORGIA--5.5%
4,300,000 Fulton County EFA for Bridgeway Foundation, 5.75%,
6/1/15 (a).............................................. 4,300,000
1,036,706 Georgia Muni. Assoc. Pool Bd. COP, 4.35%, 12/15/20
(a)..................................................... 1,036,706
3,200,000 Hapeville IDA for Tender Hapeville Hotel, 4.45%, 11/1/05
(a)..................................................... 3,200,000
3,250,000 Macon-Bibb County IDA for I75 Business Park & Airport,
4.40%, 7/1/20 (a)....................................... 3,250,000
3,050,000 Municipal Electric Authority of Georgia, 4.25%, 8/11/00
(b)..................................................... 3,050,000
-----------------
14,836,706
-----------------
ILLINOIS--3.8%
2,000,000 Chicago O'Hare Int'l Airport, 4.35%, 12/1/17 (a)........ 2,000,000
2,500,000 Illinois DFA for Shakespeare Project, 4.33%, 1/1/19
(a)..................................................... 2,500,000
400,000 Illinois HFAR, 4.30%, 3/1/21 (a)........................ 400,000
1,700,000 Illinois HFAR for Carlyle Foundation, Series B, 4.15%,
7/1/28 (a).............................................. 1,700,000
400,000 Illinois HFAR for Swedish Convenant Hospital, 3.90%,
8/15/27 (a)............................................. 400,000
1,000,000 Illinois PCR for Commonwealth Edison, Series C, 4.10%,
3/1/09 (a).............................................. 1,000,000
500,000 McCook Illinois for St. Andrew Society-B, 4.45%, 12/1/21
(a)..................................................... 500,000
200,000 Naperville Illinois for Heritage YMCA Group, 4.25%,
12/1/29 (a)............................................. 200,000
1,525,000 Streamwood IDA for Olde Church Centre Project, 4.65%,
12/1/14 (a)............................................. 1,525,000
-----------------
10,225,000
-----------------
IOWA--0.8%
1,000,000 Des Moines HFAR for Iowa Methodist Medical Center
Project, 4.15%, 8/1/15 (a).............................. 1,000,000
1,365,000 Polk County Hospital Equipment Revenue, 4.30%, 12/1/02
(a)..................................................... 1,365,000
-----------------
2,365,000
-----------------
INDIANA--2.4%
5,000,000 Indiana Bond Bank GO BAN, Series A-2, 4.75%, 1/18/01.... 5,018,244
1,500,000 Indiana TFA, Series A, 5.00%, 6/1/01 (b)................ 1,503,150
-----------------
6,521,394
-----------------
KENTUCKY--2.9%
5,645,000 Kentucky Asset/Liability, 4.15%, 7/12/00 (b)............ 5,645,000
2,235,000 Lexington Fayette Urban Residential Facilities for
Richmond Place Assoc. Project, 4.35%, 4/1/15 (a) ....... 2,235,000
-----------------
7,880,000
-----------------
LOUISIANA--3.5%
1,500,000 Calcasieu Parish PCR, 4.20%, 8/1/04 (a)................. 1,500,000
1,075,000 Louisiana PFA for College & University Equipment, 4.30%,
9/1/10 (a).............................................. 1,075,000
7,000,000 Louisiana PFA, 4.00%, 6/19/20 (a)....................... 7,000,000
-----------------
9,575,000
-----------------
MAINE--1.2%
1,755,000 Maine HEFA, Series A, 4.15%, 7/1/22 (a)................. 1,755,000
1,600,000 Maine HEFA, Series B, 4.20%, 12/1/25 (a)................ 1,600,000
-----------------
3,355,000
-----------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE>
RESERVE TAX-EXEMPT TRUST--INTERSTATE TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--MAY 31, 2000 (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS (CONTINUED) (NOTE 1)
--------- ---------------------------------- --------
<C> <S> <C>
MARYLAND--0.9%
$ 600,000 Baltimore IDA for Baltimore Cap Acquisition, 4.10%,
8/1/16 (a).............................................. $ 600,000
900,000 Maryland Health & Higher Education Authority for
Hospital Closure Issue, Series A, 4.35%, 11/1/49 (a).... 900,000
1,000,000 Maryland Health & Higher Education Authority for Pooled
Loan Program, Series A, 4.00%, 4/1/35 (a)............... 1,000,000
-----------------
2,500,000
-----------------
MASSACHUSETTS--3.0%
1,000,000 Boston WSR Series A, 4.15%, 11/1/24 (a)................. 1,000,000
1,500,000 Massachusetts Bay Transit Authority, Series B, 7.875%,
3/1/21 (b).............................................. 1,568,536
500,000 Massachusetts GO Series 97B, 5.00%, 1/1/01 (b).......... 502,041
800,000 Massachusetts GO Series A, 4.25%, 9/1/16 (a)............ 800,000
300,000 Massachusetts GO Series B, 4.30%, 8/1/15 (a)............ 300,000
100,000 Massachusetts HEFA for Brigham & Women's Hospital,
4.00%, 7/1/17 (a)....................................... 100,000
35,000 Massachusetts HEFA for Becker College, 5.10%,
7/1/09 (a).............................................. 35,000
500,000 Massachusetts HEFA for Capital Asset Program, 5.00%,
1/1/01 (b).............................................. 500,000
1,200,000 Massachusetts HEFA for Capital Asset Program, Series D,
4.45%, 1/1/35 (a)....................................... 1,200,000
100,000 Massachusetts HEFA for Capital Asset Program,
Series G-1, 3.75%, 1/1/19 (a)........................... 100,000
200,000 Massachusetts HEFA for Hallmark Health System,
Series B, 4.35%, 7/1/27 (a)............................. 200,000
200,000 Massachusetts HFA for Multi-Family Housing Project,
4.00%, 1/15/10 (a)...................................... 200,000
465,000 Massachusetts IDR for Lower Mills, 4.35%, 12/1/20 (a)... 465,000
140,000 Massachusetts IFA for Quemco, Series B, 4.15%, 9/1/01
(a)..................................................... 140,000
600,000 Massachusetts Water Resource Authority, Series A, 4.00%,
4/1/28 (a).............................................. 600,000
400,000 Massachusetts Water Resource Authority, Series D, 4.00%,
8/1/37 (a).............................................. 400,000
100,000 Massachusetts Wholesale Electric Power Supply System,
Series C, 4.00%, 7/1/19 (a)............................. 100,000
-----------------
8,210,577
-----------------
MICHIGAN--1.4%
900,000 Delta County EDC for MEAD Escambia Paper, Series C,
4.40%, 12/1/23 (a)...................................... 900,000
735,000 Garden City HFAR for Garden City Hospital, 4.40%, 9/1/26
(a)..................................................... 735,000
400,000 Jackson County EDC for Thrifty Leoni Inc. Project,
4.37%, 12/1/14 (a)...................................... 400,000
200,000 Michigan HFA for St. Mary Hospital of Livonia, 4.20%,
7/1/17 (a).............................................. 200,000
550,000 Michigan Job Development Authority for Wyandotte Cort,
4.10%, 12/1/09 (a)...................................... 550,000
1,000,000 Wayne State University, 4.50%, 11/15/00 (b)............. 1,001,437
-----------------
3,786,437
-----------------
MINNESOTA--3.0%
1,400,000 Cohasset for Minnesota Power & Light, 4.40%, 6/1/13
(a)..................................................... 1,400,000
4,000,000 Seaway Port Authority Duluth for St. Lawrence Cement,
4.40%, 3/1/20 (a)....................................... 4,000,000
2,650,000 St. Cloud HRB, 4.30%, 7/1/27 (a)........................ 2,650,000
-----------------
8,050,000
-----------------
NEVADA--3.3%
9,000,000 Las Vegas Valley Water District, 4.10%, 6/6/00 (b)...... 9,000,000
-----------------
NEW JERSEY--4.3%
1,800,000 Bernard Township BAN, 5.15%, 5/18/01.................... 1,806,596
1,000,000 Camden Improvement Authority for Jewish Community
Center, 4.25%, 12/1/10 (a).............................. 1,000,000
700,000 Essex County Improvement Authority for the Children's
Institute, 4.20%, 2/1/20 (a)............................ 700,000
600,000 Essex County Improvement Authority, 3.85%, 12/1/25
(a)..................................................... 600,000
3,200,000 New Jersey EDA for Volvo of America Corp., 4.67%--4.78%,
12/1/04 (a)............................................. 3,200,000
700,000 New Jersey EFA for College of New Jersey, Series A,
4.10%, 7/1/29 (a)....................................... 700,000
1,000,000 New Jersey HCF for Hospital Corp. Asset, 4.05%, 7/1/35
(a)..................................................... 1,000,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE>
RESERVE TAX-EXEMPT TRUST--INTERSTATE TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--MAY 31, 2000 (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS (CONTINUED) (NOTE 1)
--------- ---------------------------------- --------
<C> <S> <C>
$1,300,000 New Jersey Sports & Exposition Authority, Series C,
4.25%, 9/1/24 (a)....................................... $ 1,300,000
1,300,000 New Jersey Turnpike Authority General, Series D, 3.80%,
1/1/18 (a).............................................. 1,300,000
-----------------
11,606,596
-----------------
NEW YORK--10.8%
7,050,000 Converse County PCR, 4.05%, 6/2/00 (b).................. 7,050,000
4,000,000 MTA, Series 98, 4.80%, 6/12/00 (b)...................... 4,000,000
3,200,000 New York City GO, Series A4, 4.30%, 8/1/22 (a).......... 3,200,000
5,000,000 New York City GO, Series A7, 4.30%, 8/1/20 (a).......... 5,000,000
400,000 New York City GO, Series D, 4.05%, 2/1/20 (a)........... 400,000
1,000,000 New York City GO, Series E5, 4.30%, 8/1/17 (a).......... 1,000,000
3,100,000 New York City GO, Series E6, 4.30%, 8/1/19 (a).......... 3,100,000
1,000,000 New York State HFA, Series A, 3.80%, 3/15/27 (a)........ 1,000,000
4,600,000 Tarrytown UFSD TAN, 4.00%, 6/26/00...................... 4,601,365
-----------------
29,351,365
-----------------
NORTH CAROLINA--0.4%
1,000,000 Lenoir Country PCR for Texasgulf, 4.38%, 12/1/03 (a).... 1,000,000
-----------------
OHIO--3.5%
300,000 Cincinnati & Hamilton County Port Authority, EDC for
Kenwood Office Association, 4.45%, 9/1/25 (a)........... 300,000
1,000,000 Clermont County HRB for Mercy Health System, Series B,
4.85%, 9/1/20 (a)....................................... 1,001,574
500,000 Columbus Electric Systems Revenue Bonds, 4.20%, 9/1/09
(a)..................................................... 500,000
250,000 Cuyahoga County HRB, Series A, 4.35%, 1/1/16 (a)........ 250,000
1,675,000 Cuyahoga HRB for Cleveland Clinic, Series A, 4.10%,
1/1/26 (a).............................................. 1,675,000
350,000 Cuyahoga HRB for University Hospital Cleveland, 4.30%,
1/1/16 (a).............................................. 350,000
750,000 Cuyahoga IDA for Allen Group, 3.95%, 12/1/15 (a)........ 750,000
600,000 Lucas County HFR for Lutheran Homes Society Project,
4.45%, 11/1/19 (a)...................................... 600,000
1,200,000 Ohio Air Quality DAR for Timken, 4.15%, 6/1/01 (a)...... 1,200,000
300,000 Ohio Air Quality DAR for Cincinnati Gas & Electric,
4.30%, 9/1/30 (a)....................................... 300,000
400,000 Ohio WDA PCR for Cleveland Electric, Series B, 4.20%,
8/1/20 (a).............................................. 400,000
1,305,000 Ottawa Hospital Facilities Luther Home of Mercy Project,
4.45%, 10/1/17 (a)...................................... 1,305,000
710,000 Sharonville IDA for Edgecomb Metals Inc., 4.25%, 11/1/09
(a)..................................................... 710,000
-----------------
9,341,574
-----------------
OKLAHOMA--0.4%
1,000,000 Tulsa IDR for Park Chase Apartment, Series A-1, 4.25%,
12/15/29 (a)............................................ 1,000,000
-----------------
OREGON--0.2%
500,000 Portland MFH for South Park Block Project A, 4.25%,
12/1/11 (a)............................................. 500,000
-----------------
PENNSYLVANIA--11.2%
1,700,000 Allegheny HDA for Allegheny General Hospital, Series B,
4.85%, 9/1/10 (a)....................................... 1,700,000
2,100,000 Allegheny HDA for Allegheny General Hospital, Series B,
4.85%, 9/1/20 (a)....................................... 2,100,000
900,000 Allegheny HDA for Children's Hospital Pittsburgh, 4.40%,
12/1/15 (a)............................................. 900,000
1,000,000 Allegheny HDA for St Francis Health System, 4.55%,
11/1/27 (a)............................................. 1,000,000
1,500,000 Allegheny IDA for Environmental Import, 4.25%, 12/1/32
(a)..................................................... 1,500,000
500,000 Allegheny IDA, Series C, 4.40%, 7/1/27 (a).............. 500,000
1,400,000 Allegheny University of Pittsburgh Project, Series 85,
4.25%, 7/1/15 (a)....................................... 1,400,000
200,000 Allegheny University of Pittsburgh Project, Series C,
4.55%, 3/1/13 (a)....................................... 200,000
600,000 Chartier Valley IDR Bonds for 1133 Penn. Ave. Assoc.,
Series A, 4.40%, 8/1/07 (a)............................. 600,000
1,600,000 Clarion County Special Development Revenue IDA for
Meritcare Project, Series A, 4.40%, 12/1/12 (a)......... 1,600,000
500,000 Conestoga Valley School District, Series B, 7.10%,
5/1/11 (b).............................................. 512,300
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE>
RESERVE TAX-EXEMPT TRUST--INTERSTATE TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--MAY 31, 2000 (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS (CONTINUED) (NOTE 1)
--------- ---------------------------------- --------
<C> <S> <C>
$1,255,000 Dallastown Area School District GO, 4.38%, 2/1/18 (a)... $ 1,255,000
200,000 Dauphin County General Authority Revenue Bonds, 4.38%,
11/1/17 (a)............................................. 200,000
300,000 Delaware Valley Finance Authority Rev. Bonds, Series B,
4.30%, 12/1/20 (a)...................................... 300,000
350,000 Emmaus GO Local Government Revenue Bonds, 4.15%, 12/1/28
(a)..................................................... 350,000
600,000 Emmaus GO Local Government Revenue Bonds, 4.20%, 3/1/24
(a)..................................................... 600,000
2,000,000 Franklin County IDA for Chambersburg Hospital, 4.40%,
12/1/24 (a)............................................. 2,000,000
2,000,000 Lancaster County HRB for Brethren Village, 4.38%,
6/15/20 (a)............................................. 2,000,000
3,000,000 Lancaster County GO, 4.38%, 5/1/30 (a).................. 3,000,000
3,325,000 Lehigh IDA for Allentown Airport, 4.25%, 12/1/05 (a).... 3,325,000
1,180,000 Montgomery County IDA for Girl Scouts, 4.50%, 2/1/25
(a)..................................................... 1,180,000
1,440,000 Philadelphia MFH for Harbor View Tower Project, 4.40%,
11/1/27 (a)............................................. 1,440,000
1,000,000 Sayre HCF for Cap Financing Project, Series L, 4.15%,
12/1/20 (a)............................................. 1,000,000
500,000 Washington County Higher Education Pooled Equipment,
4.35%, 11/1/05 (a)...................................... 500,000
300,000 York General Authority Pooled Financing, 4.40%, 9/1/26
(a)..................................................... 300,000
600,000 York General Authority Pooled Financing, Series A,
4.35%, 9/1/26 (a)....................................... 600,000
500,000 York IDA for Public Service Electric & Gas, Series A,
3.90%, 9/1/20 (a)....................................... 500,000
-----------------
30,562,300
-----------------
RHODE ISLAND--1.1%
3,000,000 East Providence TAN, 4.50%, 7/7/00...................... 3,001,074
-----------------
SOUTH CAROLINA--0.5%
1,285,000 South Carolina EFA for Anderson College, 4.45%, 10/1/23
(a)..................................................... 1,285,000
-----------------
TENNESSEE--0.4%
290,000 Chattanooga IDA for Baylor School Project, 4.40%,
11/1/16 (a)............................................. 290,000
765,000 Franklin HEFA for Franklin Health Care Center, 4.85%,
6/1/05 (a).............................................. 765,000
-----------------
1,055,000
-----------------
TEXAS--7.4%
1,010,000 Addison GO, 6.25%, 2/15/01 (b).......................... 1,023,778
5,000,000 Austin for Travis & Williamson Utilities, Series A,
4.25%, 8/11/00 (b)...................................... 5,000,000
1,700,000 Harris County HFDC for YMCA, 4.35%, 7/1/34 (a).......... 1,700,000
900,000 Midlothian IDC PCR for Box-Crow Cement Project, 4.05%,
12/1/09 (a)............................................. 900,000
1,000,000 Sabine River Authority PCR for Texas Utilities, 4.35%,
3/1/26 (a).............................................. 1,000,000
10,500,000 Texas TRAN, Series A, 4.50%, 8/31/00.................... 10,520,183
-----------------
20,143,961
-----------------
VIRGINIA--8.7%
1,900,000 Albemarle County IDA for University Virginia, 4.15%,
10/1/22 (a)............................................. 1,900,000
1,940,000 Alexandria IDA for Pooled Loan Project, Series A, 4.15%,
7/1/26 (a).............................................. 1,940,000
265,000 Bristol IDA for Healthcare Center Inc., 4.85%, 3/1/10
(a)..................................................... 265,000
2,400,000 Clarke County IDA for Winchester Medical Center, 4.30%,
1/1/30 (a).............................................. 2,400,000
1,220,000 Hampton MFH for Shoreline Apartments, 4.25%, 12/1/19
(a)..................................................... 1,220,000
1,025,000 Henrico County IDA for Hermitage, 4.40%, 8/1/23 (a)..... 1,025,000
1,900,000 Loudoun County IDA for Falcons Landing, 4.10%, 11/1/28
(a)..................................................... 1,900,000
900,000 Lynchburg IDA HRB for VHA Mid Atlantic States Inc.,
4.20%, 12/1/25 (a)...................................... 900,000
850,000 Newport News MFH for Newport--Oxford Project, 4.40%,
11/1/06 (a)............................................. 850,000
5,000,000 Norfolk Airport Authority, 4.00%, 8/23/00 (b)........... 5,000,000
800,000 Richmond IDA for Ninth & Cary Association, 4.35%, 9/1/10
(a)..................................................... 800,000
300,000 Roanoke County IDA for Friendship Manor, 4.30%, 8/1/13
(a)..................................................... 300,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE>
RESERVE TAX-EXEMPT TRUST--INTERSTATE TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--MAY 31, 2000 (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS (CONTINUED) (NOTE 1)
--------- ---------------------------------- --------
<C> <S> <C>
$5,000,000 Roanoke IDA for Carilion Health Systems, Series B,
4.45%, 7/1/27 (a)....................................... $ 5,000,000
250,000 Virginia College Building Authority EFA for University
Richmond, 4.35%, 11/1/22 (a)............................ 250,000
-----------------
23,750,000
-----------------
WASHINGTON--0.9%
2,400,000 Port of Seattle IDC for Douglas Management Corp., 4.45%,
12/1/05 (a)............................................. 2,400,000
-----------------
WEST VIRGINIA--0.4%
1,000,000 West Virginia School Building Authority, 7.25%, 7/1/15
(b)..................................................... 1,022,556
-----------------
WISCONSIN--0.1%
400,000 Green Bay IDA for St. Mary's Holdings, Inc., 4.40%,
11/1/00 (a)............................................. 400,000
-----------------
WYOMING--2.8%
7,500,000 Sweetwater County PCR, 3.90%, 6/7/00 (b)................ 7,500,000
-----------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS (COST $283,683,493)............... 104.3% 283,683,493
LIABILITIES, LESS OTHER ASSETS...................... (4.3) (11,739,139)
-------- ------------
NET ASSETS.......................................... 100.0% $271,944,354
======== ============
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE,
BASED ON 271,944,354 SHARES OF BENEFICIAL INTEREST,
$.001 PAR VALUE OUTSTANDING................................... $1.00
============
</TABLE>
-----------------
(a) The interest rates, as reported on May 31, 2000, are subject to change
periodically. Securities payable on demand are collateralized by bank
letters of credit or other credit agreements.
(b) Securities are collateralized by letters of credit or other credit
agreements.
SECURITY TYPE ABBREVIATIONS
BAN -- Bond Anticipation Notes
COP -- Certificate of Participation
DAR -- Development Authority Revenue Bonds
DFA -- Development Finance Authority Revenue Bonds
EDA -- Economic Development Authority Revenue Bonds
EDC -- Economic Development Corporation
EFA -- Educational Facilities Authority
GO -- General Obligation Bonds
HCF -- Health Care Facility Financing Authority
HDA -- Hospital Development Authority
HEFA -- Health & Education Facilities Authority
HFA -- Housing Finance Authority
HFAR -- Health Facilities Authority Revenue Bonds
HFDC -- Health Facilities Development Corp.
HFR -- Health Facilities Revenue Bonds
HRB -- Hospital Revenue Bonds
IDA -- Industrial Development Authority Revenue Bonds
IDC -- Industrial Development Corporation Revenue Bonds
IDR -- Industrial Development Agency Revenue Bonds
IFA -- Industrial Finance Agency Revenue Bonds
MFH -- Multi-family Housing Revenue Bonds
MTA -- Metropolitan Transportation Authority
PCR -- Pollution Control Revenue Bonds
PFA -- Public Finance Authority
STRB -- Sales Tax Revenue Bonds
TAN -- Tax Anticipation Notes
TFA -- Transportation Finance Authority Highway Revenue Bonds
TRAN -- Tax & Revenue Anticipation Notes
UFSD -- Union Free School District
URAB -- Urban Renewal Authority Bonds
WDA -- Water Development Authority
WSR -- Water & Sewer Revenue Bonds
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE>
RESERVE NEW YORK TAX-EXEMPT TRUST--NEW YORK TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--MAY 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS--99.5% (NOTE 1)
--------- ----------------------------- --------
<C> <S> <C>
$ 2,365,000 Bleecker HDC Terrace Apt., Project S85, 4.35%, 7/1/15
(a)..................................................... $ 2,365,000
2,000,000 Elmont UFSD, TAN, 3.90%, 6/29/00........................ 2,000,517
2,000,000 Elmont UFSD, TAN, 4.00%, 6/29/00........................ 2,000,664
1,430,000 Great Neck North Water Authority, WSR, 4.15%, 1/1/20
(a)..................................................... 1,430,000
3,100,000 Guilderland IDA for North Eastern Industrial Park, Ser.
1993 A, 4.25%, 12/1/08 (a).............................. 3,100,000
2,000,000 Hempstead Town IDA Resource Recovery for Corp. Credit,
4.05%, 12/1/10 (a)...................................... 2,000,000
3,500,000 Jefferson IDA for Watertown Carthage Project, 4.30%,
12/1/12 (a)............................................. 3,500,000
7,000,000 Long Island Power Authority, NY Electric System,
Series 4, 3.90%, 6/8/00 (b)............................. 7,000,000
5,000,000 Metropolitan Transit Authority GO, 3.95%, 6/14/00 (b)... 5,000,000
3,000,000 Metropolitan Transit Authority GO, 3.95%, 6/8/00 (b).... 3,000,000
5,000,000 Metropolitan Transit Authority GO, 4.00%, 6/12/00 (b)... 5,000,000
2,295,000 Metropolitan Transit Authority GO, 6.00%, 7/1/19 (b).... 2,298,953
3,800,000 Metropolitan Transit Authority GO, 7.50%, 7/1/16 (b).... 3,886,972
2,240,000 Metropolitan Transit Authority GO, 7.50%, 7/1/19 (b).... 2,280,233
1,150,000 New Rochelle BAN, 4.50%, 10/12/00....................... 1,151,220
4,650,000 New York City Cultural Resources for Asia Society,
4.00%, 4/1/30 (a)....................................... 4,650,000
4,000,000 New York City GO, Custodial Receipts, Series A31, 4.29%,
7/2/00 (a).............................................. 4,000,000
900,000 New York City GO, Series A4, 4.05%, 2/1/20 (a).......... 900,000
4,000,000 New York City GO, Series A4, 4.25%, 8/1/21 (a).......... 4,000,000
4,000,000 New York City GO, Series B5, 3.95%, 8/15/23 (a)......... 4,000,000
1,450,000 New York City GO, Series B8, 3.85%, 8/15/24 (a)......... 1,450,000
4,600,000 New York City GO, Series D, 3.90%, 2/1/22 (a)........... 4,600,000
2,800,000 New York City GO, Series D, 3.95%, 2/1/21 (a)........... 2,800,000
2,750,000 New York City GO, Series E2, 4.30%, 8/1/20 (a).......... 2,750,000
1,500,000 New York City GO, Series E3, 4.30%, 8/1/23 (a).......... 1,500,000
4,100,000 New York City GO, Series E4, 4.30%, 8/1/22 (a).......... 4,100,000
5,800,000 New York City GO, Series E5, 4,30%, 8/1/17 (a).......... 5,800,000
1,200,000 New York City GO, Series E5, 4.30%, 8/1/10 (a).......... 1,200,000
1,000,000 New York City GO, Series E5, 4.30%, 8/1/15 (a).......... 1,000,000
1,000,000 New York City GO, Series E5, 4.30%, 8/1/16 (a).......... 1,000,000
1,000,000 New York City GO, Series E5, 4.30%, 8/1/19 (a).......... 1,000,000
2,000,000 New York City GO, Series H6, 3.95%, 6/8/00 (b).......... 2,000,000
5,000,000 New York City HDC for Upper Fifth Avenue Project, 4.30%,
1/1/16 (a).............................................. 5,000,000
2,500,000 New York City HDC MFHR for Monterey, Series A, 3.19%,
11/15/19 (a)............................................ 2,500,000
5,900,000 New York City HDC MFHR for James Tower, 3.80%, 7/1/05
(a)..................................................... 5,900,000
2,250,000 New York City Health & Hospital, Series A, 3.90%,
2/15/26 (a)............................................. 2,250,000
5,355,000 New York City Health & Hospital, Series C, 3.80%,
2/15/26 (a)............................................. 5,355,000
866,000 New York City IDA for American Civil Liberties, 4.20%,
6/1/12 (a).............................................. 866,000
4,900,000 New York City IDA for Childrens Oncology Society, 3.90%,
5/1/21 (a).............................................. 4,900,000
1,500,000 New York City IDA for Stroheim & Romann Inc. Project,
4.25%, 12/1/15 (a)...................................... 1,500,000
500,000 New York City WSR, Series G, 4.30%, 6/15/24 (a)......... 500,000
1,200,000 New York State Dormitory Authority for Oxford University
Press, 3.80%, 7/1/25 (a)................................ 1,200,000
6,700,000 New York State Dormitory Authority for Public Library,
3.85%, 7/1/28 (a)....................................... 6,700,000
5,500,000 New York State Environmental, Series A, 4.65%, 7/11/00
(b)..................................................... 5,500,000
7,590,000 New York State HFA for Normandie Court, 3.70%, 5/15/15
(a)..................................................... 7,590,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE>
RESERVE NEW YORK TAX-EXEMPT TRUST--NEW YORK TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--MAY 31, 2000 (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS (CONTINUED) (NOTE 1)
--------- ---------------------------------- --------
<C> <S> <C>
$ 1,000,000 New York State HFA for Related Liberty View, Series A,
3.80%, 11/15/19 (a)..................................... $ 1,000,000
7,500,000 New York State HFA Service Contract Rev. Bonds,
Series A, 3.80%, 3/15/27 (a)............................ 7,500,000
7,000,000 New York State HFA, Series A, 3.90%, 3/15/28 (a)........ 7,000,000
1,885,000 New York State Local Government Assistance Corp.,
Series A, 3.80%, 4/1/22 (a)............................. 1,885,000
14,180,000 New York State Local Government Assistance Corp.,
Series B, 3.75%, 4/1/25 (a)............................. 14,180,000
3,000,000 New York State Local Government Assistance Corp.,
Series C, 7.00%, 4/1/10 (b)............................. 3,125,507
7,000,000 North Shore CSD, BAN, 4.00%, 7/13/00.................... 7,004,030
4,200,000 Onondaga County IDR for Edgecomb Metals Project, 4.25%,
11/1/09 (a)............................................. 4,200,000
2,400,000 Onondaga County IDR for McLane Co. Project, 4.85%,
11/1/04 (a)............................................. 2,400,000
5,000,000 Rochester BAN, 4.75%, 3/7/01............................ 5,019,775
1,410,000 Seneca County IDA for New York Chiropractic College,
4.25%, 11/1/27 (a)...................................... 1,410,000
4,000,000 Suffolk County IDR for Jefferson Ferry, 3.85%, 11/1/09
(a)..................................................... 4,000,000
4,550,000 Syracuse IDA for General Accident Insurance, 3.90%,
12/1/03 (a)............................................. 4,550,000
1,800,000 Triborough Bridge & Tunnel Authority, Series T, 6.00%,
1/1/22 (b).............................................. 1,806,669
2,945,000 Triborough Bridge & Tunnel Authority, Series T, 7.00%,
1/1/20 (b).............................................. 3,047,401
11,000,000 Triborough Bridge & Tunnel Authority, Series C, 4.10%,
1/1/13 (a).............................................. 11,000,000
1,300,000 Yonkers IDA Civic Revenue Bonds for Consumers Union
Facility, 3.90%, 7/1/19 (a)............................. 1,300,000
4,400,000 Yonkers IDR Civic Revenue Bonds for Consumers Union
Facility, 3.90%, 7/1/21 (a)............................. 4,400,000
-----------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS (COST $227,352,941)............... 99.5% 227,352,941
OTHER ASSETS, LESS LIABILITIES...................... 0.5 1,074,633
-------- ------------
NET ASSETS.......................................... 100.0% $228,427,574
======== ============
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE BASED
ON 228,427,574 SHARES OF BENEFICIAL INTEREST,
$.001 PAR VALUE OUTSTANDING................................... $1.00
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE>
RESERVE TAX-EXEMPT TRUST--CALIFORNIA II TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--MAY 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS--96.9% (NOTE 1)
--------- ----------------------------- --------
<C> <S> <C>
$1,000,000 Anaheim UFSD for Facilities Building Funding, 3.85%,
9/1/13 (a).......................................... $ 1,000,000
1,745,000 Beverly Hills Public Financing Lease, Series A,
4.00%, 6/1/00 (b)................................... 1,745,000
500,000 California Community Development for North
California Retirement Officers, 4.20%, 6/1/26 (a)... 500,000
650,000 California EDA for Independent System, Series C,
4.00%, 4/1/08 (a)................................... 650,000
1,500,000 California EDA for KQED Inc. Project, 3.80%, 4/1/20
(a)................................................. 1,500,000
4,200,000 California EDA Independent Systems, Class A, 4.10%,
4/1/08 (a).......................................... 4,200,000
2,900,000 California HFF for Adventist Health Systems,
Series A, 4.05%, 8/1/21 (a)......................... 2,900,000
600,000 California PCR for Pacific Gas & Electric,
Series A, 4.15%, 12/1/18 (a)........................ 600,000
2,500,000 California PCR for Pacific Gas & Electric,
Series E, 4.50%, 11/1/26 (a)........................ 2,500,000
2,200,000 California PCR for Pacific Gas & Electric,
Series F, 4.15%, 11/1/26 (a)........................ 2,200,000
1,300,000 California PCR for Reynolds Metals, 3.70%, 12/1/15
(a)................................................. 1,300,000
1,500,000 California RAN, Series A, 4.00%, 6/30/00............ 1,500,813
1,800,000 California School Facilities for Capital Improvement
Financing Projects, Series B, 3.80%, 7/1/24 (a)..... 1,800,000
2,500,000 California School Facilities for Capital Improvement
Financing Projects, Series C, 3.80%, 7/1/22 (a)..... 2,500,000
2,000,000 Chula Vista MHR for Terra Nova Association, 3.50%,
3/1/05 (a).......................................... 2,000,000
1,000,000 Elsinore Valley, WDS, Series A, 3.50%, 7/1/29 (a)... 1,000,000
1,500,000 Fremont PFA for Family Resource Center, 4.05%,
8/1/28 (a).......................................... 1,500,000
2,500,000 Hayward MHR for Shorewood, 3.90%, 8/1/14 (a)........ 2,500,000
1,500,000 Huntington Beach TAN, 4.25%, 10/3/00................ 1,504,275
500,000 Irvine Ranch Water District, 4.15%, 10/1/10 (a)..... 500,000
2,000,000 Irvine Ranch Water District, 4.15%, 9/1/06 (a)...... 2,000,000
1,200,000 Irvine Ranch Water District, 4.15%, 9/2/15 (a)...... 1,200,000
1,700,000 Kern County COP, Series A, 3.50%, 8/1/06 (a)........ 1,700,000
1,500,000 Los Angeles Community Redevelopment Agency for
Baldwin Hills, 3.40%, 12/1/14 (a)................... 1,500,000
1,420,000 Los Angeles Metropolitan Transit Authority, 5.50%,
7/1/00 (b).......................................... 1,422,411
3,000,000 Los Angeles Water Waste, 4.25%, 8/16/00 (b)......... 3,000,000
700,000 MSR Public Power Agency for San Juan, 3.90%, 7/1/22
(a)................................................. 700,000
1,160,000 Northern California Power Agency for Geothermal
Project, 5.50%, 7/1/00 (b).......................... 1,161,677
2,800,000 Northern California Transmission, Series B, 3.25%,
7/13/00 (b)......................................... 2,800,000
3,300,000 Oakland COP for Capital Equipment, 3.75%, 12/1/15
(a)................................................. 3,300,000
1,535,000 Oakland Redevelopment Agency for Central District,
5.40%, 2/1/01 (b)................................... 1,552,388
2,300,000 Orange County COP, Series C, 4.15%, 8/1/17 (a)...... 2,300,000
1,080,000 Palomar Pomerado Health Systems, 4.25%, 11/1/00
(b)................................................. 1,082,398
1,500,000 Puerto Rico Electric Power Authority, Series W,
6.00%, 7/1/00 (b)................................... 1,502,733
4,800,000 Riverside County COP, Class A, 4.05%, 12/1/15 (a)... 4,800,000
700,000 Riverside County Housing Authority MHR for Tyler
Springs Apartments, Class C, 3.75%, 1/15/27 (a)..... 700,000
4,000,000 San Francisco Bay Area Rapid Transit, 3.35%, 6/8/00
(b)................................................. 4,000,000
900,000 San Francisco City and County Redevelopment for MHR,
3.40%, 12/1/17 (a).................................. 900,000
2,500,000 San Francisco MHR for Bayside Village, Series D,
4.50%, 12/1/05 (a).................................. 2,500,000
2,000,000 San Joaquin County, 3.40%, 6/8/00 (b)............... 2,000,000
1,920,000 San Jose Redevelopment Agency, Tax Allocation Merged
Area, 4.75%, 8/1/00 (b)............................. 1,923,582
1,810,000 South Orange County Public Financing Authority GO,
4.50%, 9/1/00 (b)................................... 1,814,873
2,000,000 Southeast Recovery Facilities Authority, Series A,
3.65%, 12/1/18 (a).................................. 2,000,000
1,200,000 Southern California Public Power Authority,
Class A, 3.50%, 7/1/23 (a).......................... 1,200,000
1,000,000 Southern California Public Power Authority, 6.00%,
7/1/18 (b).......................................... 1,002,100
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
RESERVE TAX-EXEMPT TRUST--CALIFORNIA II TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--MAY 31, 2000 (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS (CONTINUED) (NOTE 1)
--------- ---------------------------------- --------
<C> <S> <C>
$1,215,000 University of California for Multipurpose Projects,
Series G, 4.50%, 9/1/00 (b)......................... $ 1,217,565
1,000,000 Upland CDA for MHR, 3.95%, 2/15/30 (a).............. 1,000,000
1,000,000 Vallejo City UFSD, Series E, 4.05%, 7/1/25 (a)...... 1,000,000
1,700,000 Ventura County Public Finance Authority, 3.30%,
8/10/00 (b)......................................... 1,700,000
1,700,000 Watereuse Finance authority, 4.00%, 5/1/28 (a)...... 1,700,000
----------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS (COST $88,579,815)................ 96.9% 88,579,815
OTHER ASSETS, LESS LIABILITIES...................... 3.1 2,789,934
-------- -----------
NET ASSETS.......................................... 100.0% $91,369,749
======== ===========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE,
BASED ON 91,369,749 SHARES OF BENEFICIAL INTEREST,
$.001 PAR VALUE OUTSTANDING................................... $1.00
===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE>
RESERVE TAX-EXEMPT TRUST--CONNECTICUT TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS--MAY 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS--92.2% (NOTE 1)
--------- ----------------------------- --------
<C> <S> <C>
$1,400,000 Connecticut DAI for Allen Group Inc.,
4.30%, 2/1/13 (a)....................... $ 1,400,000
700,000 Connecticut DAI for Conco Medical,
4.15%, 11/1/05 (a)...................... 700,000
4,975,000 Connecticut DAI for Independent Living
Proj., 4.00%, 7/1/15 (a)................ 4,975,000
413,500 Connecticut DAI for Regional YMCA
Project, 4.65%, 6/1/08 (a).............. 413,500
1,400,000 Connecticut Development Authority PCR
for Central Vermont Public Service,
4.40%, 12/1/15 (a)...................... 1,400,000
950,000 Connecticut HEFA for Charlotte
Hungerford Hospital, Series C, 4.10%,
7/1/13 (a).............................. 950,000
500,000 Connecticut HEFA for Gaylord Hospital,
Series A, 3.95%, 7/1/20 (a)............. 500,000
280,000 Connecticut HEFA for Kingswood Oxford
School Issue, Series A, 4.65%,
2/1/09 (a).............................. 280,000
5,000,000 Connecticut HEFA for New Haven Hospital,
Class F, 7.10%, 7/1/25 (b).............. 5,112,590
1,100,000 Connecticut HEFA for Pomfret School
Issue, Series A, 4.25%, 7/1/24 (a)...... 1,100,000
950,000 Connecticut HEFA for Sharon Hospital,
Series A, 4.10%, 7/1/27 (a)............. 950,000
1,500,000 Connecticut HEFA for Summerwood
University, Series A, 3.90%,
7/1/30 (a).............................. 1,500,000
1,000,000 Connecticut HEFA for Yale University,
Series T-1. 4.30%, 7/1/29 (a)........... 1,000,000
1,500,000 Connecticut HEFA for Yale University,
Series V, 4.10%, 7/1/33 (a)............. 1,500,000
300,000 Connecticut HFA, Series G, 4.15%,
5/15/18 (a)............................. 300,000
2,000,000 Connecticut Special Asmt. Unemployment
Comp., Series A, 5.50%, 11/15/00 (b).... 2,015,099
2,200,000 Connecticut Special Asmt. Unemployment
Comp., Series A, 5.50%, 5/15/01 (b)..... 2,229,628
1,500,000 Connecticut Special Asmt. Unemployment
Comp., Series C, 3.38%, 11/15/01 (b).... 1,500,000
1,000,000 Connecticut State for Bradley
International Airport, 7.35%,
10/1/00 (b)............................. 1,011,752
4,880,000 Connecticut State GO, Series B, 4.25%,
5/15/14 (a)............................. 4,880,000
4,770,000 Connecticut State Special Tax
Transportation Infrastructure Second
Lien Revenue Bonds, 4.10%,
12/1/10 (a)............................. 4,770,000
2,400,000 Hartford Redev. Agency MHR for Underwood
Towers Project, 4.05%, 6/1/20 (a)....... 2,400,000
300,000 Puerto Rico GO, 5.90%, 7/1/00 (b)....... 300,434
2,700,000 Puerto Rico Highway Authority, 8.00%,
7/1/18 (b).............................. 2,763,361
1,200,000 Puerto Rico PCR for Reynolds Metals,
3.50%, 9/1/13 (a)....................... 1,200,000
500,000 Shelton County HFA for Crosby Commons
Project, 4.20%, 1/1/31 (a).............. 500,000
1,500,000 South Central Connecticut WSR, 5.10%,
8/1/00 (b).............................. 1,502,479
-----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS (COST $47,153,843)................ 92.2% $47,153,843
OTHER ASSETS, LESS LIABILITIES...................... 7.8 3,974,879
-------- -----------
NET ASSETS.......................................... 100.0% $51,128,722
======== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE>
RESERVE TAX-EXEMPT TRUST--CONNECTICUT TAX-EXEMPT FUND
STATEMENT OF ASSETS AND LIABILITIES--MAY 31, 2000
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (cost
$47,153,843)...................................... $ 47,153,843
Cash.............................................. 3,532,242
Accrued interest receivable....................... 444,034
------------
Total Assets.................................. 51,130,119
------------
LIABILITIES
Other payables and accrued expenses............... 1,397
------------
NET ASSETS........................................ $ 51,128,722
============
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER
SHARE, BASED ON 51,128,722 SHARES OF BENEFICIAL
INTEREST, $.001 PAR VALUE OUTSTANDING............. $1.00
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE>
RESERVE TAX-EXEMPT TRUST--FLORIDA TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS--MAY 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS--93.3% (NOTE 1)
--------- ----------------------------- --------
<C> <S> <C>
FLORIDA--58.1%
$ 425,000 Brevard County MHR for Malabar Lakes
Proj., 4.25%, 12/1/10 (a)............... $ 425,000
500,000 Broward County School District,
Series C, 4.60%. 4/11/01 (b)............ 501,648
680,000 Dade County IDA Aviation Authority
Facilities, Series 84A, 3.85%,
10/1/09 (a)............................. 680,000
1,000,000 Dade County IDA for Dolphin Stadium
Project, Series B, 4.10%, 1/1/16 (a).... 1,000,000
495,000 Florida BOE, Series E, 7.25%,
6/1/23 (b).............................. 504,900
1,015,000 Florida HFA, 4.45%, 6/1/07 (a).......... 1,015,000
1,500,000 Florida Local Gov. Authority, 4.50%,
6/27/00 (a)............................. 1,500,000
225,000 Gulf Breeze IDA Revenue Bonds, 4.30%,
12/1/15 (b)............................. 225,000
1,500,000 Indian River Hospital District, 4.10%,
6/7/00 (b).............................. 1,500,000
1,000,000 Martin County PCR for Florida Power &
Light Co. Proj., 4.40%, 7/15/22 (a)..... 1,000,000
1,300,000 Miami Dade County School Board,
Series C, 4.25%, 8/1/00 (b)............. 1,300,627
700,000 Orange County IDA for Trinity Prep
School, Series A, 4.60%, 10/1/23 (a).... 700,000
1,000,000 Palm Beach County School District,
5.50%, 8/1/00 (b)....................... 1,002,610
300,000 Pasco County School District, 5.75%,
7/1/00 (b).............................. 300,398
400,000 Pinnellas County for Chi Chi Rodriguez
Foundation, 4.45%, 8/1/16 (a)........... 400,000
1,000,000 Pinnellas County Recovery, Series A,
6.60%, 10/1/00 (b)...................... 1,008,041
500,000 Pinnellas School District, TAN, 4.25%,
6/30/00................................. 500,231
150,000 Polk County IDA, 4.55% 1/1/11 (a)....... 150,000
200,000 Port St. Lucie IDA for Florida Power and
Light, 4.55%, 1/1/11 (a)................ 200,000
565,000 Sarasota County Public Hospital
District, 4.00%, 6/12/00 (b)............ 565,000
1,200,000 Seminole County School District, 5.70%.
8/1/00 (b).............................. 1,203,329
100,000 Sunshine State GO, 4.30%, 7/1/16 (a).... 100,000
1,000,000 Volusia County HEFA for South West
Volusia Health, 4.35%, 11/15/23 (a)..... 1,000,000
-----------
16,781,784
-----------
ARIZONA--5.9%
1,700,000 Pima County IDA for Tucson Electric
Power, Series A, 4.15%, 12/1/22 (a)..... 1,700,000
-----------
GEORGIA--2.4%
700,000 Fulton County Development Authority for
Alfred & Adele Davis, 4.35%,
12/1/19 (a)............................. 700,000
-----------
ILLINOIS--7.1%
850,000 Illinois HFA for Northwest Community
Hospital, Series B, 4.40%,
10/1/15 (a)............................. 850,000
1,200,000 McCook for St. Andrew Society,
Series B, 4.30%, 12/1/21 (a)............ 1,200,000
-----------
2,050,000
-----------
INDIANA--2.4%
700,000 Indiana HEFA for Community Mental
Health & Rehabilitation, 4.30%,
11/1/20 (a)............................. 700,000
-----------
LOUISIANA--2.8%
800,000 Calcasieu Parish IDR PCR, 4.20%,
8/1/04 (a).............................. 800,000
-----------
MARYLAND--1.5%
400,000 Baltimore IDA for Cap. Acquisition,
4.10%, 8/1/16 (a)....................... 400,000
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
18
<PAGE>
RESERVE TAX-EXEMPT TRUST--FLORIDA TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS--MAY 31, 2000 (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS (CONTINUED) (NOTE 1)
--------- ---------------------------------- --------
<C> <S> <C>
NEBRASKA--1.4%
$ 390,000 Buffalo County IDR for Agrex Inc.,
4.35%, 2/1/15 (a)....................... $ 390,000
-----------
PENNSYLVANIA--1.4%
400,000 Allegheny County HDA for Allegheny
General Hospital, Series B, 4.85%,
9/1/20 (a).............................. 400,000
-----------
TEXAS--2.4%
700,000 Midlothian IDA PCR for Box Crow Cement,
4.05%, 12/1/09 (a)...................... 700,000
-----------
WASHINGTON--1.0%
300,000 Port of Seattle IDA, 4.45%,
12/1/05 (a)............................. 300,000
-----------
WISCONSIN--6.9%
2,000,000 Green Bay IDA for St. Mary's
Holdings, Inc., 4.40%, 11/1/00 (a)...... 2,000,000
-----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS (COST $26,921,784)................ 93.3% 26,921,784
OTHER ASSETS, LESS LIABILITIES...................... 6.7 1,940,787
-------- -----------
NET ASSETS.......................................... 100.0% $28,862,571
======== ===========
</TABLE>
RESERVE TAX-EXEMPT TRUST--FLORIDA TAX-EXEMPT FUND
STATEMENT OF ASSETS AND LIABILITIES--MAY 31, 2000
<TABLE>
<S> <C>
ASSETS
Investment in securities, at value (cost
$26,921,784)...................................... $26,921,784
Cash.............................................. 1,720,641
Accrued interest receivable....................... 224,767
----------
Total Assets.................................. 28,867,192
----------
LIABILITIES
Other payables and accrued expenses............... 4,621
----------
NET ASSETS........................................ $28,862,571
==========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER
SHARE BASED ON 28,862,571 SHARES OF BENEFICIAL
INTEREST, $.001 PAR VALUE OUTSTANDING............. $1.00
==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
19
<PAGE>
RESERVE TAX-EXEMPT TRUST--MASSACHUSETTS TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS--MAY 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS--91.4% (NOTE 1)
--------- ----------------------------- --------
<C> <S> <C>
$ 495,000 Dartmouth GO, 6.50%, 8/1/00 (b)......... $ 497,047
500,000 Massachusetts Bay Transit Authority,
Series B, 7.88%, 3/1/21 (b)............. 522,845
1,000,000 Massachusetts DFA for Elderhostel,
4.20%, 9/30/30 (a)...................... 1,000,000
300,000 Massachusetts DFA for New Bedford
Whaling Museum, 4.25%, 9/1/29 (a)....... 300,000
700,000 Massachusetts GO, 4.25%, 9/1/16 (a)..... 700,000
500,000 Massachusetts GO, 5.00%, 1/1/01 (b)..... 502,040
200,000 Massachusetts HEFA Brigham & Women's
Hospital, 4.00%, 7/1/17 (a)............. 200,000
200,000 Massachusetts HEFA for Becker College,
Series A-2, 4.30%, 7/1/09 (a)........... 200,000
500,000 Massachusetts HEFA for Boston
University, 4.20% 12/1/29 (a)........... 500,000
485,000 Massachusetts HEFA for Endicott College,
Series B, 4.35%, 10/1/18 (a)............ 485,000
200,000 Massachusetts HEFA for Partnership
Healthcare System, 4.00%, 7/1/27 (a).... 200,000
500,000 MassachusettsHEFA, Series B, 8.00%,
7/1/18 (b).............................. 511,606
1,000,000 Massachusetts HEFA for University of
Massachusetts, Series A, 3.95%,
11/1/30 (a)............................. 1,000,000
600,000 Massachusetts HEFA for Wellesley
College, Series B, 4.00%, 7/1/22 (a).... 600,000
400,000 Massachusetts HEFA for Williams College,
4.10%, 8/1/14 (a)....................... 400,000
700,000 Massachusetts HFA for Multifamily
Housing, 4.00%, 1/15/10 (a)............. 700,000
200,000 Massachusetts IDA for KRH Rolls Project,
4.70%, 5/1/06 (a)....................... 200,000
200,000 Massachusetts IFA for Gordon College,
4.20%, 12/1/27 (a)...................... 200,000
700,000 Massachusetts IFA for Governor Dummer
Academy, 4.20%, 7/1/26 (a).............. 700,000
300,000 Massachusetts IFA for Holyoke Water
Power Project, 3.80%, 5/1/22 (a)........ 300,000
700,000 Massachusetts IFA for Lower Mills
Association, 4.35%, 12/1/20 (a)......... 700,000
400,000 Massachusetts Municipal Wholesale
Electric Power Supply Systems,
Series C, 4.00%, 7/1/19 (a)............. 400,000
700,000 Massachusetts WRA, 3.85%, 6/9/00 (b).... 700,000
700,000 Massachusetts WRA, Series A, 4.00%,
4/1/28 (a).............................. 700,000
600,000 Massachusetts WRA, Series B, 4.00%,
8/1/37 (a).............................. 600,000
500,000 Massachusetts WRA, Series D, 4.00%,
11/1/26 (a)............................. 500,000
1,000,000 Springfield Municipal Purpose Loan,
4.50%, 9/1/00 (b)....................... 1,001,349
400,000 Watertown BAN, 4.25%, 11/16/00.......... 400,670
-----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS (COST $14,720,557)................ 91.4% 14,720,557
OTHER ASSETS, LESS LIABILITIES...................... 8.6 1,387,245
-------- -----------
NET ASSETS.......................................... 100.0% $16,107,802
======== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
20
<PAGE>
RESERVE TAX-EXEMPT TRUST--MASSACHUSETTS TAX-EXEMPT FUND
STATEMENT OF ASSETS AND LIABILITIES--MAY 31, 2000
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (cost
$14,720,557)...................................... $14,720,557
Cash.............................................. 1,267,597
Accrued interest receivable....................... 122,289
----------
Total Assets.................................. 16,110,443
----------
LIABILITIES
Other payables and accrued expenses............... 2,641
----------
NET ASSETS........................................ $16,107,802
==========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER
SHARE, BASED ON 16,107,802 SHARES OF BENEFICIAL
INTEREST, $.001 PAR VALUE OUTSTANDING............. $1.00
==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
21
<PAGE>
RESERVE TAX-EXEMPT TRUST--MICHIGAN TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS--MAY 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS--92.3% (NOTE 1)
--------- ----------------------------- --------
<C> <S> <C>
$100,000 Bruce Catholic Health Initiatives,
4.15%, 5/1/18 (a)....................... $ 100,000
200,000 Cornell Township EDC for Mead Escanaba
Paper, 4.30%, 11/1/16 (a)............... 200,000
100,000 Delta County EDC for Mead Escanaba
Paper, Series D, 4.35%, 12/1/23 (a)..... 100,000
100,000 Delta County EDC for Mead Escanaba
Paper, Series E, 4.35%, 12/1/23 (a)..... 100,000
125,000 Detroit EDC for Waterfront Reclamation,
Series C, 4.45%, 5/1/09 (a)............. 125,000
100,000 Detroit Sewer Disposal, Series B, 3.95%,
7/1/23 (a).............................. 100,000
100,000 Detroit Water Supply Systems, 4.05%,
7/1/13 (a).............................. 100,000
70,000 Garden City Hospital Finance Authority,
4.40%, 9/1/26 (a)....................... 70,000
100,000 Grand Rapids Water Supply System, 4.00%,
1/1/20 (a).............................. 100,000
100,000 Jackson EDC for Thrifty Leoni Project,
4.37%, 12/1/14 (a)...................... 100,000
100,000 Michigan HDA for Fairlane Meadow, 4.20%,
12/1/07 (a)............................. 100,000
100,000 Michigan Hospital Finance Authority for
Hospital Equipment, Series A, 4.00%,
12/1/23 (a)............................. 100,000
100,000 Michigan Hospital Finance Authority for
St. Mary Hospital of Livonia, 4.20%,
7/1/17 (a).............................. 100,000
100,000 Michigan HDA for Harbortown Ltd., 4.37%,
6/1/04 (a).............................. 100,000
100,000 Michigan HDA, Series B, 4.05%,
4/1/19 (a).............................. 100,000
100,000 Michigan Job Development Authority for
Gordon Food Service, 4.45%,
8/1/15 (a).............................. 100,000
100,000 Michigan Job Development Authority for
Wyandotte Cort, 4.10%, 12/1/09 (a)...... 100,000
100,000 Michigan Strategic Fund for Allen Group
Inc., 4.15%, 11/1/25 (a)................ 100,000
100,000 Michigan Strategic Fund for Detroit
Edison, Series C, 4.45%, 9/1/30 (a)..... 100,000
----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS (COST $1,995,000)................. 92.3% 1,995,000
OTHER ASSETS, LESS LIABILITIES...................... 7.7 166,773
-------- ----------
NET ASSETS.......................................... 100.0% $2,161,773
======== ==========
</TABLE>
RESERVE TAX-EXEMPT TRUST--MICHIGAN TAX-EXEMPT FUND
STATEMENT OF ASSETS AND LIABILITIES--MAY 31, 2000
<TABLE>
<S> <C>
ASSETS
Investment in securities, at value (cost
$1,995,000)..................................... $1,995,000
Cash.............................................. 156,944
Accrued interest receivable....................... 11,432
---------
Total Assets.................................. 2,163,376
---------
LIABILITIES
Other payables and accrued expenses............... 1,603
---------
NET ASSETS........................................ $2,161,773
=========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER
SHARE, BASED ON 2,161,773 SHARES OF BENEFICIAL
INTEREST, $.001 PAR VALUE OUTSTANDING........... $1.00
=========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
22
<PAGE>
RESERVE TAX-EXEMPT TRUST--NEW JERSEY TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS--MAY 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS--93.0% (NOTE 1)
--------- ----------------------------- --------
<C> <S> <C>
$1,800,000 Atlantic City Pooled Loan Program,
3.75%, 7/1/26 (a)....................... $ 1,800,000
700,000 Bernards Township BAN, 5.15%, 5/18/01... 702,565
500,000 Bergen County GO, 4.50%, 7/15/00........ 500,437
1,400,000 Camden Improvement Authority, 4.25%,
12/1/10 (a)............................. 1,400,000
2,200,000 Camden Improvement Authority, 4.30%,
6/1/29 (a).............................. 2,200,000
1,000,000 Casino Reinvestment Development
Authority, Series A, 5.00%,
10/1/00 (b)............................. 1,002,591
900,000 Essex County Improvement Authority,
3.85%, 12/01/25 (a)..................... 900,000
800,000 Essex Improvement Authority for the
Children's Institute, 4.20%,
2/1/20 (a).............................. 800,000
1,500,000 Freehold Township BAN, 4.25%,
11/10/00................................ 1,502,877
1,275,000 Gloucester County GO, 4.70%,
6/1/00 (b).............................. 1,275,000
2,000,000 Jersey City Redevelopment Authority for
Dixon Mills Apartments, 3.75%,
5/15/30 (a)............................. 2,000,000
1,000,000 Middlesex County BAN, 4.50%, 1/19/01.... 1,003,168
1,300,000 Monmouth County Improvement Authority
Pooled Government Loan Program, 3.90%,
8/1/16 (a).............................. 1,300,000
300,000 New Jersey EDA for Bayonne IMTT Docking,
Series B, 4.10%, 12/1/27 (a)............ 300,000
200,000 New Jersey EDA for Bayonne IMTT Docking,
Series C, 4.10%, 12/1/27 (a)............ 200,000
985,000 New Jersey EDA for Catholic Community
Series, 4.30%, 11/1/13 (a).............. 985,000
680,000 New Jersey EDA for Economic Growth Bond,
Series F, 4.25%, 8/1/14 (a)............. 680,000
2,100,000 New Jersey EDA for Foreign Trade Zone,
4.40%, 12/1/07 (a)...................... 2,100,000
200,000 New Jersey EDA for NJ Natural Gas Co.,
3.95%, 1/1/28 (a)....................... 200,000
800,000 New Jersey EDA for RJB Association,
4.20%, 8/1/08 (a)....................... 800,000
900,000 New Jersey EDA for St. James Preparatory
School, 4.20%, 12/1/27 (a).............. 900,000
950,000 New Jersey EDA for St. Peters School,
4.30%, 1/1/10 (a)....................... 950,000
400,000 New Jersey EDA for Trailer Marine Corps
Project, 4.25%, 2/1/02 (a).............. 400,000
2,100,000 New Jersey EDA for Volvo of American
Corp., 4.68%, 12/1/04 (a)............... 2,100,000
750,000 New Jersey EDA, Series CC, 3.90%,
12/1/09 (a)............................. 750,000
1,300,000 New Jersey EFA for College of NJ,
Series A, 4.10%, 7/1/29 (a)............. 1,300,000
1,200,000 New Jersey EFA for Higher Education,
Series A, 5.13%, 9/1/00 (b)............. 1,204,313
3,400,000 New Jersey HCF for Hospital Capital
Asset, Series C, 4.05%, 7/1/35 (a)...... 3,400,000
710,000 New Jersey Sports Expo Authority,
Series C, 4.25%, 9/1/24 (a)............. 710,000
1,000,000 New Jersey Transportation Authority,
4.50%, 12/15/00 (b)..................... 1,001,954
2,150,000 New Jersey Transportation Authority,
Series A, GO, 6.00%, 6/15/00 (b)........ 2,151,894
2,100,000 New Jersey Turnpike Authority,
Series D, 3.80%, 1/1/18 (a)............. 2,100,000
300,000 Port Authority NY and NJ, Series 5,
4.30%, 8/1/24 (a)....................... 300,000
400,000 Port Authority NY and NJ, Series 2,
4.35%, 5/1/19 (a)....................... 400,000
500,000 Somerset County GO, 4.70%, 9/1/00....... 501,128
480,000 State of New Jersey GO, 7.00%,
4/1/03 (b).............................. 492,560
1,000,000 University of Puerto Rico, Series N,
4.63%, 6/1/00 (b)....................... 1,000,000
-----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS (COST $41,313,487)................ 93.0% 41,313,487
OTHER ASSETS, LESS LIABILITIES...................... 7.0 3,120,601
-------- -----------
NET ASSETS.......................................... 100.0% $44,434,088
======== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
23
<PAGE>
RESERVE TAX-EXEMPT TRUST--NEW JERSEY TAX-EXEMPT FUND
STATEMENT OF ASSETS AND LIABILITIES--MAY 31, 2000
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (cost
$41,313,487)...................................... $41,313,487
Cash.............................................. 2,735,006
Accrued interest receivable....................... 386,809
----------
Total Assets.................................. 44,435,302
----------
LIABILITIES
Other payables and accrued expenses............... 1,214
----------
NET ASSETS........................................ $44,434,088
==========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER
SHARE, BASED ON 44,434,088 SHARES OF BENEFICIAL
INTEREST, $.001 PAR VALUE OUTSTANDING............. $1.00
==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
24
<PAGE>
RESERVE TAX-EXEMPT TRUST--OHIO TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS--MAY 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS--78.9% (NOTE 1)
--------- ----------------------------- --------
<C> <S> <C>
$300,000 Columbus Electric Systems, 4.20%,
9/1/09 (a).............................. $ 300,000
300,000 Cuyahoga County HRB for Cleveland
Clinic, Series A, 4.10%, 1/1/26 (a)..... 300,000
200,000 Cuyahoga County HRB for University
Hospital, 4.30%, 1/1/16 (a)............. 200,000
100,000 Cuyahoga County HRB for University
Hospital, Series D, 4.35%, 1/15/29
(a)..................................... 100,000
400,000 Cuyahoga HRB for Cleveland Clinic,
Series A, 4.15%, 1/1/16 (a)............. 400,000
750,000 Cuyahoga IDA for Allen Group Project,
3.95%, 12/1/15 (a)...................... 750,000
100,000 Franklin County HRB for US Health Corp.,
Series A, 4.32%, 12/1/21 (a)............ 100,000
100,000 Franklin County IDR for Kinder-Care
Learning Centers, Series A, 4.40%,
6/1/02 (a).............................. 100,000
400,000 Hamilton County HRB for Bethesda
Hospital, 4.20%, 2/15/24 (a)............ 400,000
400,000 Lucas County HEFA for Lutheran Home
Society, 4.45%, 11/1/19 (a)............. 400,000
100,000 Ohio Air Quality Dev. Authority for
Cincinnati Gas & Electric, 4.45%,
9/1/30 (a).............................. 100,000
500,000 Ohio Air Quality Dev. Authority for
Cincinnati Gas & Electric, 4.30%,
9/1/30 (a).............................. 500,000
300,000 Ohio Air Quality Dev. Authority for Mead
Corp., 4.30%, 10/1/01 (a)............... 300,000
800,000 Ohio Air Quality Dev. Authority for
Timken, 4.15%, 6/1/01 (a)............... 800,000
700,000 Ohio Water Development Authority PCR for
Cleveland Electric, Series B, 4.20%,
8/1/20 (a).............................. 700,000
400,000 Ottawa County HRB for Luther Home of
Mercy, 4.45%, 10/1/17 (a)............... 400,000
800,000 Port Authority of Cincinnati and
Hamilton Counties for Kenwood Office
Association, 4.45%, 9/1/25 (a).......... 800,000
400,000 Sharonville IDA for Edgecomb Metals
Inc., 4.25%, 11/1/09 (a)................ 400,000
----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS (COST $7,050,000)................. 78.9% 7,050,000
OTHER ASSETS, LESS LIABILITIES...................... 21.1 1,883,649
-------- ----------
NET ASSETS.......................................... 100.0% $8,933,649
======== ==========
</TABLE>
RESERVE TAX-EXEMPT TRUST--OHIO TAX-EXEMPT FUND
STATEMENT OF ASSETS AND LIABILITIES--MAY 31, 2000
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (cost
$7,050,000)..................................... $7,050,000
Cash.............................................. 1,855,607
Accrued interest receivable....................... 34,636
---------
Total Assets.................................. 8,940,243
---------
LIABILITIES
Other payables and accrued expenses............... 6,594
---------
NET ASSETS........................................ $8,933,649
=========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER
SHARE, BASED ON 8,933,649 SHARES OF BENEFICIAL
INTEREST, $.001 PAR VALUE OUTSTANDING........... $1.00
=========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
25
<PAGE>
RESERVE TAX-EXEMPT TRUST--PENNSYLVANIA TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS--MAY 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS--84.5% (NOTE 1)
--------- ----------------------------- --------
<C> <S> <C>
$ 500,000 Allegheny HDA for Allegheny Hospital,
Series B, 4.85%, 9/1/10 (a)............. $ 500,000
500,000 Allegheny HDA for Allegheny Hospital,
Series B, 4.85%, 9/1/20 (a)............. 500,000
500,000 Allegheny HDA for Allegheny Hospital,
Series C, 4.55%, 3/1/13 (a)............. 500,000
500,000 Allegheny GO, Series C, 6.10%,
9/1/00 (b).............................. 502,744
300,000 Allegheny HDA for Childrens' Hospital
Pittsburgh, Series B, 4.40%,
12/1/15 (a)............................. 300,000
300,000 Allegheny IDA, Series C, 4.40%,
7/1/27 (a).............................. 300,000
1,000,000 Allegheny IDA for Environmental
Improvements, 4.25% 12/1/32 (a)......... 1,000,000
1,030,000 Bucks IDA for Edgecomb Metals Co.,
4.25%, 10/1/09 (a)...................... 1,030,000
764,000 Chartier Valley IDA Bonds for 1133 Penn
Ave. Associates, Series A, 4.40%,
8/1/07 (a).............................. 764,000
500,000 Conestoga Valley School District,
Series B, 7.10%, 5/1/11 (b)............. 512,300
1,000,000 Delaware County IDA for Scotfoam Corp.,
4.05%, 10/1/05 (a)...................... 1,000,000
1,000,000 Delaware Valley Regional Finance
Authority, 4.10%, 12/1/20 (a)........... 1,000,000
795,000 Emmaus General Authority, 4.20%,
3/1/24 (a).............................. 795,000
300,000 Emmaus General Authority, 4.40%,
3/1/24 (a).............................. 300,000
600,000 Emmaus General Authority, 4.20%,
3/2/24 (a).............................. 600,000
350,000 Emmaus General Authority, 4.15%,
12/1/28 (a)............................. 350,000
500,000 Lancaster County, 4.38%, 5/1/30 (a)..... 500,000
1,000,000 Lancaster County HRB for Brethren
Village, 4.38%, 6/15/20 (a)............. 1,000,000
300,000 Lehigh IDA for Allentown Airport, 4.25%,
12/1/05 (a)............................. 300,000
1,255,000 Mercersburg General Purpose for
Mercersburg College, 4.30%,
11/1/27 (a)............................. 1,255,000
1,000,000 Montgomery County IDA PCR, 4.05%,
6/12/00 (b)............................. 1,000,000
1,200,000 Montgomery IDA for Girls Scouts, 4.50%,
2/1/25 (a).............................. 1,200,000
300,000 Northeastern HRB for Wyoming Valley
Health Care, 4.10%, 1/1/24 (a).......... 300,000
500,000 Parkland School District, 5.00%,
9/1/00 (b).............................. 500,955
1,000,000 Pennsylvania GO, 6.60%, 1/1/01 (b)...... 1,013,424
200,000 Philadelphia Gas Works, 4.25%,
8/1/00 (b).............................. 200,112
400,000 Philadelphia MHR for Harbor View Tower,
4.40%, 11/1/27 (a)...................... 400,000
200,000 Pittsburgh GO, Series A, 5.00%,
3/1/01 (b).............................. 201,053
-----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS (COST $17,824,588)................ 84.5% 17,824,588
OTHER ASSETS, LESS LIABILITIES...................... 15.5 3,260,541
-------- -----------
NET ASSETS.......................................... 100.0% $21,085,129
======== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
26
<PAGE>
RESERVE TAX-EXEMPT TRUST--PENNSYLVANIA TAX-EXEMPT FUND
STATEMENT OF ASSETS AND LIABILITIES--MAY 31, 2000
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (cost
$17,824,588)...................................... $17,824,588
Cash.............................................. 3,137,126
Accrued interest receivable....................... 126,827
----------
Total Assets.................................. 21,088,541
----------
LIABILITIES
Other payables and accrued expenses............... 3,412
----------
NET ASSETS........................................ $21,085,129
==========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER
SHARE, BASED ON 21,085,129 SHARES OF BENEFICIAL
INTEREST, $.001 PAR VALUE OUTSTANDING............. $1.00
==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
27
<PAGE>
RESERVE TAX-EXEMPT TRUST--VIRGINIA TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS--MAY 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT TAX-EXEMPT OBLIGATIONS--52.3% (NOTE 1)
--------- ----------------------------- --------
<C> <S> <C>
$100,000 Albemarle County IDA for University of
Virginia, 4.15%, 10/1/22 (a)............ $ 100,000
100,000 Bristol IDA for Bristol Health Care
Center, 4.85%, 3/1/10 (a)............... 100,000
100,000 Clarke County IDA for Winchester Medical
Center, 4.30%, 1/1/30 (a)............... 100,000
100,000 Hampton MHR for Shoreline Apartments,
4.25%, 12/1/19 (a)...................... 100,000
100,000 Loudoun County IDA for Falcons Landing,
4.10%, 11/1/28 (a)...................... 100,000
100,000 Lynchburgh IDA, 4.20%, 12/1/25 (a)...... 100,000
100,000 Newport News Redevelopment & Housing for
Newport Oxford, 4.40%, 11/1/06 (a)...... 100,000
100,000 Norfolk IDA for Children's Hospital,
4.40%, 6/1/20 (a)....................... 100,000
100,000 Peninsula Port Authority for Dominion
Term., 4.35%, 7/1/16 (a)................ 100,000
100,000 Puerto Rico Government Development Bank,
3.40%, 12/1/15 (a)...................... 100,000
100,000 Virginia College Building Authority for
University of Richmond 4.35%,
11/1/22 (a)............................. 100,000
----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS (COST $1,100,000)................. 52.3% 1,100,000
OTHER ASSETS, LESS LIABILITIES...................... 47.7 1,004,222
-------- ----------
NET ASSETS.......................................... 100.0% $2,104,222
======== ==========
</TABLE>
RESERVE TAX-EXEMPT TRUST--VIRGINIA TAX-EXEMPT FUND
STATEMENT OF ASSETS AND LIABILITIES--MAY 31, 2000
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (cost
$1,100,000)....................................... $1,100,000
Cash.............................................. 1,001,341
Accrued interest receivable....................... 4,613
---------
Total Assets.................................. 2,105,954
---------
LIABILITIES
Other payables and accrued expenses............... 1,732
---------
NET ASSETS........................................ $2,104,222
=========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER
SHARE, BASED ON 2,104,222 SHARES OF BENEFICIAL
INTEREST, $.001 PAR VALUE OUTSTANDING............. $1.00
=========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
28
<PAGE>
FOOTNOTES TO PORTFOLIO STATEMENTS
SECURITY TYPE ABBREVIATIONS:
<TABLE>
<S> <C> <C>
BAN -- Bond Anticipation Notes
BOE -- Board of Education
CDA -- Communit7y Redevelopment Agency
COP -- Certificate of Participation
CSD -- Central School District
Development Authority Industrial
DAI -- Refunding Bonds
DFA -- Development Finance Agency
Economic Development Authority Revenue
EDA -- Bonds
EDC -- Economic Development Corporation
EFA -- Education Facilities Authority
GO -- General Obligation Bonds
HCF -- Health Care Facilities Revenue Bonds
HDA -- Hospital Development Authority
HDC -- Housing Development Corporation Bonds
HEFA -- Health & Education Facilities Authority
Housing Facilities Authority Revenue
HFA -- Bonds
HFF -- Health Facilities Financing Authority
HRB -- Hospital Revenue Bonds
Industrial Development Authority Revenue
IDA -- Bonds
Industrial Development Agency Revenue
IDR -- Bonds
IFA -- Industrial Finance Agency Revenue Bonds
MHR -- Multifamily Housing Revenue Bonds
PCR -- Pollution Control Revenue Bonds
PFA -- Public Finance Authority
RAN -- Revenue Anticipation Notes
TAN -- Tax Anticipation Notes
UFSD -- Union Free School District
WDS -- Water District Certificates
WRA -- Water Resource Authority
WSR -- Water System Revenue Bonds
</TABLE>
-----------------
(a) The interest rates, as reported on May 31, 2000, are subject to change
periodically. Securities payable on demand, are collateralized by bank
letters of credit or other credit agreements.
(b) Securities are collateralized by bank letters of credit or other credit
agreements.
SEE NOTES TO FINANCIAL STATEMENTS.
29
<PAGE>
THE RESERVE FUND
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MAY 31, 2000
<TABLE>
<CAPTION>
U.S. U.S.
PRIMARY GOVERNMENT TREASURY
FUND FUND FUND
------------ ----------- -----------
<S> <C> <C> <C>
INTEREST INCOME (Note 1)........... $216,080,457 $40,385,517 $16,331,461
------------ ----------- -----------
EXPENSES (Note 2)
Management fee................... 946,261 232,213 --
Comprehensive fee................ 28,376,946 5,506,073 2,549,541
Distribution assistance.......... 7,528,836 1,471,218 637,466
Other............................ 783,000 145,752 674
------------ ----------- -----------
Total Expenses before waiver... 37,635,043 7,355,256 3,187,681
Less: expenses waived
(Note 2)..................... -- -- (434,951)
------------ ----------- -----------
Net Expenses................... 37,635,043 7,355,256 2,752,730
------------ ----------- -----------
NET INVESTMENT INCOME, representing
net increase in Net Assets
from Investment Operations....... $178,445,414 $33,030,261 $13,578,731
============ =========== ===========
</TABLE>
RESERVE TAX-EXEMPT TRUST--INTERSTATE TAX-EXEMPT FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MAY 31, 2000
<TABLE>
<S> <C>
INTEREST INCOME (Note 1).......................... $10,299,118
----------
EXPENSES (Note 2)
Management fee.................................. 98,045
Comprehensive fee............................... 2,130,759
Distribution assistance......................... 572,134
Other expense................................... 59,501
----------
Total Expenses................................ 2,860,439
----------
NET INVESTMENT INCOME, representing net increase
in Net Assets
from Investment Operations...................... $7,438,679
==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
30
<PAGE>
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MAY 31, 2000
<TABLE>
<CAPTION>
RESERVE
NEW YORK
TAX-EXEMPT
TRUST RESERVE TAX-EXEMPT TRUST
---------- ---------------------------------------------------
NEW YORK CALIFORNIA II CONNECTICUT FLORIDA MASSACHUSETTS
FUND FUND (1) FUND FUND FUND
---------- ------------- ----------- -------- -------------
<S> <C> <C> <C> <C> <C>
INTEREST INCOME
(Note 1)............... $6,984,215 $1,945,864 $1,844,763 $943,070 $472,626
---------- ---------- ---------- -------- --------
EXPENSES (Note 2)
Management fee......... 61,896 -- 17,596 7,546 4,863
Comprehensive
management fee....... 1,476,313 476,709 402,668 192,611 98,563
Distribution (12b-1)
fees................. 393,904 119,177 107,715 51,174 26,598
Other expenses......... 37,811 -- 11,231 5,201 3,592
---------- ---------- ---------- -------- --------
Total expenses before
waivers............ 1,969,924 595,886 539,210 256,532 133,616
Expenses waived...... -- (24,022) -- -- --
---------- ---------- ---------- -------- --------
Total expenses after
waivers............ 1,969,924 571,864 539,210 256,532 133,616
---------- ---------- ---------- -------- --------
NET INVESTMENT INCOME.... $5,014,291 $1,374,000 $1,305,553 $686,538 $339,010
========== ========== ========== ======== ========
</TABLE>
<TABLE>
<CAPTION>
RESERVE TAX-EXEMPT TRUST
-----------------------------------------------------
MICHIGAN NEW JERSEY OHIO PENNSYLVANIA VIRGINIA
FUND FUND FUND FUND FUND (2)
-------- ---------- ------- ------------ --------
<S> <C> <C> <C> <C> <C>
INTEREST INCOME
(Note 1)............... $50,075 $1,499,567 $81,465 $676,624 $7,514
------- ---------- ------- -------- ------
EXPENSES (Note 2)
Management fee......... -- 13,730 -- 5,779 --
Comprehensive
management fee....... 11,118 341,410 16,505 135,734 1,444
Distribution (12b-1)
fees................. 2,780 85,263 4,127 36,252 361
Other expenses......... -- 8,912 -- 4,141 --
------- ---------- ------- -------- ------
Total expenses before
waivers............ 13,898 449,315 20,632 181,906 1,805
Expenses waived...... -- -- -- -- (73)
------- ---------- ------- -------- ------
Total expenses after
waivers............ 13,898 449,315 20,632 181,906 1,732
------- ---------- ------- -------- ------
NET INVESTMENT INCOME.... $36,177 $1,050,252 $60,833 $494,718 $5,782
======= ========== ======= ======== ======
</TABLE>
---------------
(1) For the period July 2, 1999 (Commencement of Operations) to May 31, 2000.
(2) For the period March 3, 2000 (Commencement of Operations) to May 31, 2000.
SEE NOTES TO FINANCIAL STATEMENTS.
31
<PAGE>
THE RESERVE FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PRIMARY FUND U.S. GOVERNMENT FUND U.S. TREASURY FUND
---------------------------------- -------------------------------- --------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MAY 31, 2000 MAY 31, 1999 MAY 31, 2000 MAY 31, 1999 MAY 31, 2000 MAY 31, 1999
---------------- ---------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS
FROM
INVESTMENT OPERATIONS:
Net investment
income............... $ 178,445,414 $ 134,365,969 $ 33,030,261 $ 29,798,286 $ 13,578,731 $ 11,017,000
---------------- ---------------- --------------- --------------- --------------- ---------------
DIVIDENDS PAID TO
SHAREHOLDERS FROM:
Net investment income
(Note 1)............. (178,445,414) (134,365,969) (33,030,261) (29,798,286) (13,578,731) (11,017,000)
---------------- ---------------- --------------- --------------- --------------- ---------------
FROM CAPITAL SHARE
TRANSACTIONS (at net
asset value of $1.00 per share):
Net proceeds from sale
of shares............ 23,580,681,398 16,224,681,639 3,858,075,628 3,450,382,930 1,623,852,533 1,315,560,422
Dividends reinvested... 178,445,414 134,365,969 33,030,261 29,798,286 13,578,731 11,017,000
Cost of shares
redeemed............. (22,733,249,526) (15,736,604,580) (3,939,601,776) (3,416,454,910) (1,526,930,793) (1,279,635,650)
---------------- ---------------- --------------- --------------- --------------- ---------------
Net increase (decrease)
derived from capital
share transactions
and from investment
operations........... 1,025,877,286 622,443,028 (48,495,887) 63,726,306 110,500,471 46,941,772
NET ASSETS:
Beginning of year...... 3,330,063,091 2,707,620,063 716,193,928 652,467,622 286,702,065 239,760,293
---------------- ---------------- --------------- --------------- --------------- ---------------
End of year............ $ 4,355,940,377 $ 3,330,063,091 $ 667,698,041 $ 716,193,928 $ 397,202,536 $ 286,702,065
================ ================ =============== =============== =============== ===============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
32
<PAGE>
RESERVE TAX-EXEMPT TRUST--INTERSTATE TAX-EXEMPT FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
MAY 31, 2000 MAY 31, 1999
--------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS:
Net investment income................. $ 7,438,679 $ 8,590,706
--------------- ---------------
DIVIDENDS PAID TO SHAREHOLDERS FROM:
Net investment income (Note 1)........ (7,438,679) (8,590,706)
--------------- ---------------
FROM CAPITAL SHARE TRANSACTIONS (at net asset value of $1.00 per share):
Net proceeds from sale of shares...... 1,476,564,219 1,500,543,145
Dividends reinvested.................. 7,438,679 8,590,706
Cost of shares redeemed............... (1,504,687,462) (1,569,373,790)
--------------- ---------------
Net decrease in net assets derived
from capital share transactions and
from Investment Operations.......... (20,684,564) (60,239,939)
NET ASSETS:
Beginning of year..................... 292,628,918 352,868,857
--------------- ---------------
End of year........................... $ 271,944,354 $ 292,628,918
=============== ===============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
33
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
RESERVE NEW YORK
TAX-EXEMPT TRUST RESERVE TAX-EXEMPT TRUST
---------------------------- ------------------------------------------------
NEW YORK FUND CALIFORNIA II FUND CONNECTICUT FUND
---------------------------- ------------------ ----------------------------
YEAR ENDED YEAR ENDED PERIOD ENDED YEAR ENDED YEAR ENDED
MAY 31, 2000 MAY 31, 1999 MAY 31, 2000(A) MAY 31, 2000 MAY 31, 1999
------------- ------------- ------------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment
income............... $ 5,014,291 $ 4,121,961 $ 1,374,000 $ 1,305,553 $ 1,006,967
------------- ------------- ------------- ------------- -------------
DIVIDENDS PAID TO SHAREHOLDERS FROM:
Net investment income
(Note 1)............. (5,014,291) (4,121,961) (1,374,000) (1,305,553) (1,006,967)
------------- ------------- ------------- ------------- -------------
FROM CAPITAL SHARE TRANSACTIONS (at net
asset value of $1.00 per share):
Net proceeds from sale
of shares............ 821,096,889 727,809,717 595,952,442 140,956,225 169,702,015
Dividends reinvested... 5,014,291 4,121,961 1,374,000 1,305,553 1,006,967
Cost of shares
redeemed............. (783,664,964) (717,162,559) (505,956,693) (146,571,734) (152,056,981)
------------- ------------- ------------- ------------- -------------
Net increase (decrease)
in net assets derived
from capital share
transactions and from
investment
operations........... 42,446,216 14,769,119 91,369,749 (4,309,956) 18,652,001
NET ASSETS:
Beginning of year...... 185,981,358 171,212,239 -- 55,438,678 36,786,677
------------- ------------- ------------- ------------- -------------
End of year............ $228,427,574 $185,981,358 $ 91,369,749 $ 51,128,722 $ 55,438,678
============= ============= ============= ============= =============
</TABLE>
-----------------
(a) For the period July 2, 1999 (Commencement of Operations) to May 31, 2000.
SEE NOTES TO FINANCIAL STATEMENTS.
34
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
RESERVE TAX-EXEMPT TRUST
---------------------------------------------------------------------------------------
FLORIDA FUND MASSACHUSETTS FUND MICHIGAN FUND
---------------------------- -------------------------- -----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
MAY 31, 2000 MAY 31, 1999 MAY 31, 2000 MAY 31, 1999 MAY 31, 2000 MAY 31, 1999(B)
------------- ------------- ------------ ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment
income............... $ 686,538 $ 509,841 $ 339,010 $ 569,377 $ 36,177 $ 14,305
------------- ------------- ------------ ------------ ------------ ----------
DIVIDENDS PAID TO SHAREHOLDERS FROM:
Net investment income
(Note 1)............. (6686,538) (509,841) (339,010) (569,377) (36,177) (14,305)
------------- ------------- ------------ ------------ ------------ ----------
FROM CAPITAL SHARE TRANSACTIONS (at net
asset value of $1.00 per share):
Net proceeds from sale
of shares............ 197,568,078 141,741,605 67,762,141 76,638,806 11,678,027 2,100,000
Dividends reinvested... 686,538 509,841 339,010 569,377 36,177 14,305
Cost of shares
redeemed............. (192,022,135) (130,438,595) (71,921,640) (82,662,880) (10,766,736) (900,000)
------------- ------------- ------------ ------------ ------------ ----------
Net increase (decrease)
in net assets derived
from capital share
transactions and from
investment
operations........... 6,232,481 11,812,851 (3,820,489) (5,454,697) 947,468 1,214,305
NET ASSETS:
Beginning of year...... 22,630,090 10,817,239 19,928,291 25,382,988 1,214,305 --
------------- ------------- ------------ ------------ ------------ ----------
End of year............ $ 28,862,571 $ 22,630,090 $16,107,802 $19,928,291 $ 2,161,773 $1,214,305
============= ============= ============ ============ ============ ==========
</TABLE>
-----------------
(b) For the period December 14, 1998 (Commencement of Operations) to May 31,
1999.
SEE NOTES TO FINANCIAL STATEMENTS.
35
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
RESERVE TAX-EXEMPT TRUST
-----------------------------------------------------------------------------------------------------
NEW JERSEY FUND OHIO FUND PENNSYLVANIA FUND VIRGINIA FUND
---------------------------- -------------------------- -------------------------- ---------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
MAY 31, 2000 MAY 31, 1999 MAY 31, 2000 MAY 31, 1999 MAY 31, 2000 MAY 31, 1999 MAY 31, 2000(C)
------------- ------------- ------------ ------------ ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment
income............... $ 1,050,252 $ 978,333 $ 60,833 $ 41,205 $ 494,718 $ 428,975 $ 5,782
------------- ------------- ------------ ----------- ------------ ------------ ----------
DIVIDENDS PAID TO SHAREHOLDERS FROM:
Net investment income
(Note 1)............. (1,050,252) (978,333) (60,833) (41,205) (494,718) (428,975) (5,782)
------------- ------------- ------------ ----------- ------------ ------------ ----------
FROM CAPITAL SHARE TRANSACTIONS (at net
asset value of $1.00 per share):
Net proceeds from sale
of shares............ 215,890,580 223,758,247 18,513,169 2,750,308 84,167,132 79,111,957 2,098,440
Dividends reinvested... 1,050,252 978,333 60,833 41,205 494,718 428,975 5,782
Cost of shares
redeemed............. (213,823,240) (221,020,524) (10,862,839) (4,075,632) (80,526,010) (75,778,781) --
------------- ------------- ------------ ----------- ------------ ------------ ----------
Net increase (decrease)
in net assets derived
from capital share
transactions and from
investment
operations........... 3,117,592 3,716,056 7,711,163 (1,284,119) 4,135,840 3,762,151 2,104,222
NET ASSETS:
Beginning of year...... 41,316,496 37,600,440 1,222,486 2,506,605 16,949,289 13,187,138 --
------------- ------------- ------------ ----------- ------------ ------------ ----------
End of year............ $ 44,434,088 $ 41,316,496 $ 8,933,649 $ 1,222,486 $21,085,129 $16,949,289 $2,104,222
============= ============= ============ =========== ============ ============ ==========
</TABLE>
-----------------
(c) For the period March 3, 2000 ( Commencement of Operations) to May 31, 2000.
SEE NOTES TO FINANCIAL STATEMENTS.
36
<PAGE>
THE RESERVE FUND (THE "FUND")
PRIMARY, U.S. GOVERNMENT AND U.S. TREASURY FUNDS (THE "FUNDS")
RESERVE NEW YORK TAX-EXEMPT TRUST ("NY TRUST")
RESERVE TAX-EXEMPT TRUST (CALIFORNIA II, CONNECTICUT, FLORIDA, INTERSTATE,
MASSACHUSETTS, MICHIGAN, NEW JERSEY, OHIO, PENNSYLVANIA AND VIRGINIA FUNDS)
("TRUST")
(THE NY TRUST AND TRUST ARE COLLECTIVELY REFERRED TO AS "TRUSTS")
NOTES TO FINANCIAL STATEMENTS
(1) SIGNIFICANT ACCOUNTING POLICIES:
--------------------------------------------------------------------------------
The Funds/Trusts are registered under the Investment Company Act of 1940 as
non-diversified, open-end investment companies. The policies summarized
below are consistently followed in the preparation of their financial
statements in conformity with generally accepted accounting principles.
A. The Fund's and Trusts' authorized shares of beneficial interest are
unlimited. The Fund's shares are divided into four (4) series: Primary,
U.S. Government, U.S. Treasury and the Strategist Money-Market. The Trust's
shares are divided into ten series: California II, Connecticut, Florida,
Interstate, Massachusetts, Michigan, New Jersey, Ohio, Pennsylvania and
Virginia Tax-Exempt Funds. The financial statements and notes apply to
Primary, U.S. Government, U.S. Treasury Funds of The Reserve Funds;
California II, Connecticut, Florida, Interstate, Massachusetts, Michigan,
New Jersey, Ohio, Pennsylvania and Virginia of Reserve Tax-Exempt Trust and
New York Fund of Reserve New York Tax-Exempt Trust. These financial
statements and notes apply to all funds mentioned above except Strategist
Money-Market Fund.
B. Securities are valued at amortized cost, which approximates market
value. The amortized cost method values a security at cost plus accrued
interest at the time of purchase, and thereafter assumes a constant
amortization to maturity of any discount or premium, irrespective of
intervening changes in interest rates or market values. The maturity of
floating or variable rate instruments in which the Fund/Trust may invest
will be deemed to be, for floating rate instruments. (1) the notice period
required before the Fund/Trust is entitled to receive payment of principal
amount of the instruments; and for variable rate instruments the longer of
(1) above or (2) the period remaining until the instrument's next rate
adjustment, for purpose of Rule 2a-7 and for computing the portfolio's
average weighted life to maturity.
C. It is the Funds'/Trusts' policy to comply with Subchapter M of the
Internal Revenue Code and to distribute all of their taxable income to
their shareholders. Accordingly, no Federal income tax provision is
required.
D. Security transactions are recorded on a trade date basis; interest
income is accrued daily and security premium or discount is amortized or
accreted daily. Net investment income is distributed to shareholders daily
and automatically reinvested in additional Fund/ Trust shares.
E. Funds may enter into repurchase agreements with financial institutions
and securities dealers who are deemed creditworthy pursuant to guidelines
established by the Funds' Board of Trustees. The Investment Adviser will
follow procedures intended to provide that all repurchase agreements are at
least 100% collateralized as to principal and interest. The Funds'/Trusts'
custodian holds the securities subject to repurchase agreements.
(2) MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
--------------------------------------------------------------------------------
Pursuant to an Investment Management Agreement (the "Agreement") between
Reserve Management Company, Inc. ("RMCI") and the Funds/Trusts, RMCI serves
as the Funds'/Trusts' Investment Adviser subject to the policies adopted by
the Board of Trustees. Under the Agreement, RMCI is responsible for the
supervision of the day-to-day operations, manages the Funds'/Trusts'
investments, effects purchases and sales thereof, and absorbs certain
promotional expenses. For its services as Investment Adviser prior to
June 26, 1999, RMCI received a management fee calculated at an annual rate
of .50% of the first $500 million, .475% of the next $500 million, .45% of
the next $500 million, .425% of the next $500 million, and .40% in excess
of $2 billion of average daily net assets of Primary Fund and U.S.
Government Fund and all the Trusts other than Ohio, Michigan and Virginia.
Effective June 26, 1999, the Primary and U.S. Government Funds and all the
Trusts other than Ohio, Michigan and Virginia entered into a new Investment
Management Agreement with RMCI, which is substantially similar to the
Investment Management Agreement previously in effect with regard to each
Fund. The U.S. Treasury, Ohio, Michigan and Virginia Funds, since
inception, have been subject to a comprehensive management fee. The
Agreement provides that RMCI will furnish continuous investment advisory
and management services to the Funds/Trusts. For its services, RMCI
receives a fee of 0.80% per year of the average daily net assets of each
Fund/Trust. RMCI pays all employee and customary operating expenses of the
Fund/Trust. Excluded from the definition of customary operating
37
<PAGE>
(2) MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES (CONTINUED)
--------------------------------------------------------------------------------
expenses are interest, taxes, brokerage fees, extraordinary legal and
accounting fees and expenses, and the fees of the disinterested Trustees,
for which each Fund/Trust pays its direct or allocated share. During the
year ended May 31, 2000, RMCI voluntarily reduced its fee for the U.S.
Treasury Fund by $339,331.
DISTRIBUTION ASSISTANCE:
---------------------------------------------------------------------------
Pursuant to a Plan of Distribution, each Fund/Trust may make assistance
payments, at a rate of .20% per annum of the average net asset value, to
firms for distribution assistance and administrative services provided to
Fund/Trust shareholders. The Plan requires RMCI to pay an equivalent amount
from its own resources. RMCI also has voluntarily agreed to reduce the
payments made by U.S. Treasury Fund to an annual rate of .17%. During the
year ended May 31, 2000, RMCI voluntarily reimbursed the Fund a total of
$95,620 pursuant to the undertaking.
(3) MANAGEMENT'S USE OF ESTIMATES:
--------------------------------------------------------------------------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at
the dates of the financial statements and the reported amounts of income
and expenses during the reporting periods. Actual results could differ from
those estimates.
(4) INVESTMENT CONCENTRATION:
--------------------------------------------------------------------------------
The Trusts invest substantially all of their assets in portfolios of
tax-exempt debt obligations primarily consisting of issuers in each of the
respective states. The issuers' ability to meet their obligations may be
affected by economic, regional or political developments. In order to
reduce the credit risk associated with such factors, the Trusts invest
substantially in obligations backed by letters of credit, bond insurance of
financial institutions, or financial guaranty assurance agencies. At
May 31, 2000, the percentage invested in such obligations amounted to:
<TABLE>
<S> <C> <C> <C>
Interstate 88% Michigan 100%
New York 92% New Jersey 89%
Connecticut 95% Ohio 100%
Florida 93% Pennsylvania 100%
Massachusetts 91% Virginia 100%
</TABLE>
(5) COMPOSITION OF NET ASSETS:
--------------------------------------------------------------------------------
At May 31, 2000, the composition of each Fund and Trust's net assets was as
follows:
<TABLE>
<CAPTION>
PRIMARY U.S. GOVERNMENT U.S. TREASURY INTERSTATE
-------------- --------------- ------------- ------------
<S> <C> <C> <C> <C>
Par Value..................... $ 4,355,940 $ 667,698 $ 397,203 $ 271,944
Paid-in-Capital............... 4,351,584,437 667,030,343 396,805,333 271,672,410
-------------- ------------ ------------ ------------
Net Assets.................... $4,355,940,377 $667,698,041 $397,202,536 $271,944,354
============== ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
NEW YORK CALIFORNIA II CONNECTICUT FLORIDA MASSACHUSETTS
-------------- ------------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
Par Value................ $ 228,428 $ 91,370 $ 51,129 $ 28,863 $ 16,108
Paid-in-Capital.......... 288,199,146 91,278,379 51,077,593 28,833,708 16,091,694
-------------- ------------ ------------ ------------ -----------
Net Assets............... $ 288,427,574 $ 91,369,749 $51,128,722 $ 28,862,571 $16,107,802
============== ============ ============ ============ ===========
<CAPTION>
MICHIGAN NEW JERSEY OHIO PENNSYLVANIA VIRGINIA
-------------- ------------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
Par Value................ $ 2,162 $ 44,434 $ 8,934 $ 21,085 $ 2,104
Paid-in-Capital.......... 2,159,611 44,389,654 8,924,715 21,064,044 2,102,118
-------------- ------------ ------------ ------------ -----------
Net Assets............... $ 2,161,773 $ 44,434,088 $ 8,933,649 $ 21,085,129 $ 2,104,222
============== ============ ============ ============ ===========
</TABLE>
38
<PAGE>
(6) FINANCIAL HIGHLIGHTS:
--------------------------------------------------------------------------------
Contained below is per share operating performance data for a share of
beneficial interest outstanding of each Fund/Trust for the periods as
indicated.
<TABLE>
<CAPTION>
FOR FISCAL YEARS ENDED MAY 31,
------------------------------------------------
2000 1999 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
PRIMARY FUND
-------------------------
Net asset value at
beginning of year...... $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
-------- -------- -------- -------- --------
Net investment income
from investment
operations............. .0492 .0438 .0483 .0457 .0490
Less dividends from net
investment income...... (.0492) (.0438) (.0483) (.0457) (.0490)
-------- -------- -------- -------- --------
Net asset value at end of
year................... $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
======== ======== ======== ======== ========
Total Return............. 4.92% 4.38% 4.83% 4.57% 4.90%
RATIOS/SUPPLEMENTAL DATA
-------------------------
Net assets at end of year
(millions)............. $4,355.9 $3,330.1 $2,707.6 $2,104.1 $1,664.1
Ratio of expenses to
average net assets..... 1.00% 1.00% .94% .98% .98%
Ratio of net investment
income to average net
assets................. 4.74% 4.26% 4.71% 4.47% 4.79%
U.S. GOVERNMENT FUND
-------------------------
Net asset value at
beginning of year...... $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
-------- -------- -------- -------- --------
Net investment income
from investment
operations............. .0471 .0426 .0471 .0449 .0484
Less dividends from net
investment income...... (.0471) (.0426) (.0471) (.0449) (.0484)
-------- -------- -------- -------- --------
Net asset value at end of
year................... $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
======== ======== ======== ======== ========
Total Return............. 4.71% 4.26% 4.71% 4.49% 4.84%
RATIOS/SUPPLEMENTAL DATA
-------------------------
Net assets at end of year
(millions)............. $ 667.7 $ 716.2 $ 652.5 $ 611.8 $ 568.5
Ratio of expenses to
average net assets..... 1.00% 1.00% .99% .99% 1.00%
Ratio of net investment
income to average net
assets................. 4.12% 4.16% 4.63% 4.40% 4.75%
U.S. TREASURY FUND
-------------------------
Net asset value at
beginning of year...... $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
-------- -------- -------- -------- --------
Net investment income
from investment
operations............. .0443 .0410 .0456 .0443 .0466
Less dividends from net
investment income...... (.0443) (.0410) (.0456) (.0443) (.0466)
-------- -------- -------- -------- --------
Net asset value at end of
year................... $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
======== ======== ======== ======== ========
Total Return............. 4.43% 4.10% 4.56% 4.43% 4.66%
RATIOS/SUPPLEMENTAL DATA
-------------------------
Net assets at end of year
(millions)............. $ 397.2 $ 286.7 $ 239.8 $ 169.2 $ 142.8
Ratio of expenses to
average net
assets (c)............. 1.00% 1.00% .97% .97% .99%
Ratio of net investment
income to average net
assets (c)............. 4.12% 3.76% 4.26% 4.13% 4.33%
INTERSTATE TAX-EXEMPT FUND
-------------------------
Net asset value at
beginning of year...... $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
-------- -------- -------- -------- --------
Net investment income
from investment
operations............. .0267 .0242 .0279 .0256 .0285
Less dividends from net
investment income...... (.0267) (.0242) (.0279) (.0256) (.0285)
-------- -------- -------- -------- --------
Net asset value at end of
year................... $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
======== ======== ======== ======== ========
Total Return............. 2.67% 2.42% 2.79% 2.56% 2.85%
RATIOS/SUPPLEMENTAL DATA
-------------------------
Net assets at end of year
(millions)............. $ 271.9 $ 292.6 $ 352.9 $ 306.2 $ 292.1
Ratio of expenses to
average net assets..... 1.00% 1.00% .97% 1.04% 1.04%
Ratio of net investment
income to average net
assets................. 2.60% 2.38% 2.75% 2.52% 2.80%
</TABLE>
39
<PAGE>
(6) FINANCIAL HIGHLIGHTS: (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR FISCAL YEARS ENDED MAY 31,
------------------------------------------------
2000 1999 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
NEW YORK TAX-EXEMPT FUND
-------------------------
Net asset value at
beginning of year...... $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
-------- -------- -------- -------- --------
Net investment income.... .0258 .0222 .0268 .0247 .0276
Dividends from net
investment income...... (.0258) (.0222) (.0268) (.0247) (.0276)
-------- -------- -------- -------- --------
Net asset value at end of
year................... $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
======== ======== ======== ======== ========
Total Return............. 2.58% 2.22% 2.68% 2.47% 2.76%
RATIOS/SUPPLEMENTAL DATA
-------------------------
Net assets at end of year
(millions)............. $ 228.4 $ 186.0 $ 171.2 $ 153.2 $ 125.5
Ratio of expenses to
average net assets..... 1.00% 1.00% .94% 1.04% 1.04%
Ratio of net investment
income to average net
assets................. 2.55% 2.19% 2.63% 2.43% 2.72%
</TABLE>
<TABLE>
<CAPTION>
FISCAL YEAR
ENDED
MAY 31,
2000(A)
-----------
<S> <C>
CALIFORNIA II TAX-EXEMPT FUND
--------------------------------------------------
Net asset value at beginning of period............ $1.0000
-------
Net investment income............................. .0208
Dividends from net investment income.............. (.0208)
-------
Net asset value at end of period.................. $1.0000
=======
Total Return...................................... 2.27%(b)
RATIOS/SUPPLEMENTAL DATA
--------------------------------------------------
Net assets at end of period (millions)............ $ 91.4
Ratio of expenses to average net assets........... 1.00%(b)(c)
Ratio of net investment income to average net
assets.......................................... 2.27%(b)(c)
</TABLE>
<TABLE>
<CAPTION>
FISCAL YEARS ENDED MAY 31,
------------------------------------------------
2000 1999 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
CONNECTICUT TAX-EXEMPT FUND
-------------------------
Net asset value at
beginning of year...... $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
-------- -------- -------- -------- --------
Net investment income.... .0248 .0221 .0267 .0243 .0266
Dividends from net
investment income...... (.0248) (.0221) (.0267) (0243) (.0266)
-------- -------- -------- -------- --------
Net asset value at end of
year................... $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
======== ======== ======== ======== ========
Total Return............. 2.48% 2.21% 2.67% 2.43% 2.66%
RATIOS/SUPPLEMENTAL DATA
-------------------------
Net assets at end of year
(millions)............. $ 51.1 $ 55.4 $ 36.8 $ 33.5 $ 34.8
Ratio of expenses to
average net assets..... 1.00% 1.00% .89% .97% 1.01%
Ratio of net investment
income to average net
assets................. 2.42% 2.17% 2.64% 2.39% 2.61%
</TABLE>
40
<PAGE>
(6) FINANCIAL HIGHLIGHTS: (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FISCAL YEARS ENDED MAY 31,
--------------------------------------
2000 1999 1998 1997(D)
-------- -------- -------- --------
<S> <C> <C> <C> <C>
FLORIDA TAX-EXEMPT FUND
------------------------------
Net asset value at beginning
of year..................... $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
-------- -------- -------- --------
Net investment income......... .0272 .0237 .0269 .0228
Dividends from net investment
income...................... (.0272) (.0237) (.0269) (.0228)
-------- -------- -------- --------
Net asset value at end of
year........................ $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
======== ======== ======== ========
Total Return.................. 2.72% 2.37% 2.69% 2.42%(b)
RATIOS/SUPPLEMENTAL DATA
------------------------------
Net assets at end of year
(millions).................. $ 28.9 $ 22.6 $ 10.8 $ 4.1
Ratio of expenses to average
net assets.................. 1.00% 1.00% .94% 1.04%(b)
Ratio of net investment income
to average net assets....... 2.68% 2.30% 2.62% 2.39%(b)
</TABLE>
<TABLE>
<CAPTION>
FISCAL YEARS ENDED MAY 31,
------------------------------------------------
2000 1999 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
MASSACHUSETTS TAX-EXEMPT FUND
-------------------------
Net asset value at
beginning of year...... $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
-------- -------- -------- -------- --------
Net investment income.... .0256 .0220 .0284 .0259 .0276
Dividends from net
investment income...... (.0256) (.0220) (.0284) (.0259) (.0276)
-------- -------- -------- -------- --------
Net asset value at end of
year................... $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
======== ======== ======== ======== ========
Total Return............. 2.56% 2.20% 2.84% 2.59% 2.76%
RATIOS/SUPPLEMENTAL DATA
-------------------------
Net assets at end of year
(millions)............. $ 16.1 $ 19.9 $ 25.4 $ 13.0 $ 9.0
Ratio of expenses to
average net assets..... 1.00% 1.00% .75% .83%(c) .90%(c)
Ratio of net investment
income to average net
assets................. 2.55% 2.17% 2.78% 2.54%(c) 2.66%(c)
</TABLE>
41
<PAGE>
(6) FINANCIAL HIGHLIGHTS: (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FISCAL YEARS ENDED
MAY 31,
------------------
2000 1999(E)
-------- --------
<S> <C> <C>
MICHIGAN TAX-EXEMPT FUND
----------------------------------------
Net asset value at beginning of
period................................ $ 1.0000 $ 1.0000
-------- --------
Net investment income................... .0263 .0118
Dividends from net investment income.... (.0263) (.0118)
-------- --------
Net asset value at end of period........ $ 1.0000 $ 1.0000
======== ========
Total Return............................ 2.63% 2.55%(b)
RATIOS/SUPPLEMENTAL DATA
----------------------------------------
Net assets at end of period
(millions)............................ $ 2.2 $ 1.2
Ratio of expenses to average net
assets................................ 1.00% 1.00%(b)(c)
Ratio of net investment income to
average net assets.................... 2.60% 2.02%(b)(c)
</TABLE>
<TABLE>
<CAPTION>
FISCAL YEARS ENDED MAY 31,
------------------------------------------------
2000 1999 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
NEW JERSEY TAX-EXEMPT FUND
-------------------------
Net asset value at
beginning of year...... $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
-------- -------- -------- -------- --------
Net investment income.... .0249 .0223 .0254 .0236 .0263
Dividends from net
investment income...... (.0249) (.0223) (.0254) (.0236) (.0263)
-------- -------- -------- -------- --------
Net asset value at end of
year................... $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
======== ======== ======== ======== ========
Total Return............. 2.49% 2.23% 2.54% 2.36% 2.63%
RATIOS/SUPPLEMENTAL DATA
-------------------------
Net assets at end of year
(millions)............. $ 44.4 $ 41.3 $ 37.6 $ 39.5 $ 41.0
Ratio of expenses to
average net assets..... 1.05% 1.00% .99% 1.06% 1.04%
Ratio of net investment
income to average net
assets................. 2.46% 2.17% 2.50% 2.33% 2.59%
</TABLE>
42
<PAGE>
(6) FINANCIAL HIGHLIGHTS: (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FISCAL YEARS ENDED MAY 31,
----------------------------
2000 1999 1998(F)
-------- -------- --------
<S> <C> <C> <C>
OHIO TAX-EXEMPT FUND
-----------------------------------
Net asset value at beginning of
year............................. $ 1.0000 $ 1.0000 $ 1.0000
-------- -------- --------
Net investment income.............. .0256 .0236 .0048
Dividends from net investment
income........................... (.0256) (.0236) (.0048)
-------- -------- --------
Net asset value at end of year..... $ 1.0000 $ 1.0000 $ 1.0000
======== ======== ========
Total Return....................... 2.56% 2.36% 2.87%(b)
RATIOS/SUPPLEMENTAL DATA
-----------------------------------
Net assets at end of year
(millions)....................... $ 8.9 $ 1.2 $ 2.5
Ratio of expenses to average net
assets........................... 1.00% 1.00%(c) 1.00%(b)
Ratio of net investment income to
average net assets............... 2.95% 2.16%(c) 2.86%(b)
</TABLE>
<TABLE>
<CAPTION>
FISCAL YEARS ENDED MAY 31,
----------------------------
2000 1999 1998(G)
-------- -------- --------
<S> <C> <C> <C>
PENNSYLVANIA TAX-EXEMPT FUND
-----------------------------------
Net asset value at beginning of
year............................. $ 1.0000 $ 1.0000 $ 1.0000
-------- -------- --------
Net investment income.............. .0276 .0234 .0189
Dividends from net investment
income........................... (.0276) (.0234) (.0189)
-------- -------- --------
Net asset value at end of year..... $ 1.0000 $ 1.0000 $ 1.0000
======== ======== ========
Total Return....................... 2.76% 2.34% 2.64%(b)
RATIOS/SUPPLEMENTAL DATA
-----------------------------------
Net assets at end of year
(millions)....................... $ 21.1 $ 16.9 $ 13.2
Ratio of expenses to average net
assets........................... 1.00% 1.00% 1.00%(b)
Ratio of net investment income to
average net assets............... 2.73% 2.28% 2.62%(b)
</TABLE>
43
<PAGE>
(6) FINANCIAL HIGHLIGHTS: (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FISCAL YEAR
ENDED
MAY 31,
2000
-----------
<S> <C>
VIRGINIA TAX-EXEMPT FUND
--------------------------------------------------
Net asset value at beginning of year.............. $ 1.0000
--------
Net investment income............................. .0075
Dividends from net investment income.............. (.0075)
--------
Net asset value at end of year.................... $ 1.0000
========
Total Return...................................... 3.08%(b)
RATIOS/SUPPLEMENTAL DATA
--------------------------------------------------
Net assets at end of year (millions).............. $ 2.1
Ratio of expenses to average net assets........... 1.01%(b)(c)
Ratio of net investment income to average net
assets.......................................... 3.19%(b)(c)
</TABLE>
---------------
(a) From July 2, 1999 (Commencement of Operations) to May 31, 2000.
(b) Annualized.
(c) Due to the voluntary waiver of certain expenses by RMCI for certain funds,
the actual expense ratios and net investment income amounted to:
<TABLE>
<CAPTION>
NET
FISCAL EXPENSE INVESTMENT
FUND YEAR RATIO INCOME
---- -------- -------- ----------
<S> <C> <C> <C>
U.S. Treasury Fund...................... 2000 .86% 4.26%
1999 .77 3.99
1998 .77 4.46
1997 .77 4.33
1996 .79 4.53
California II........................... 2000 96 2.31
Massachusetts........................... 1997 .79 2.58
1996 .84 2.71
Michigan................................ 1999 .49 2.53
Ohio.................................... 1999 .83 2.32
Virginia................................ 2000 .97 3.23
</TABLE>
(d) From June 24, 1996 (Commencement of Operations) to May 31, 1997.
(e) From December 14, 1998 (Commencement of Operations) to May 31, 1999.
(f) From April 1, 1998 (Commencement of Operations) to May 31, 1998.
(g) From September 12, 1997 (Commencement of Operations) to May 31, 1998.
(h) From March 3, 2000 (Commencement of Operations) to May 31, 2000.
FEDERAL TAX INFORMATION
The dividends distributed by the Trusts are "exempt interest dividends" for
federal tax purposes.
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